Another devaluation of the Chinese yuan, for a second day – lanacion.com (Argentina)

The Chinese yuan Wednesday reached a minimum in four years, falling for a second day after the authorities devalued in a decision that sparked fears of a global currency war and accusations that Beijing is giving an unfair advantage to its exporters.

The yuan cash in China fell to 6.44 units against the dollar, its lowest level since August 2011, after the central bank set its midpoint daily reference 6.3306, below the depreciation on Tuesday.

The central bank, which described the devaluation as an exceptional measure for the yuan more responsive to market forces, tried to reassure the Wednesday financial in saying that it is embarking on a steady depreciation markets.

“Given the domestic and international economic situation, currently there is no basis for a sustained trend depreciation of the yuan “said the PBOC in a statement.

Do not miss the analysis in The Wall Street Journal Americas depreciation of the Chinese currency and the impact on the world of that decision.

However, a senior trader at a European bank in Shanghai said the unexpected devaluation had caused “some panic” in the markets . “Although the central bank offered explanations again today, emphasizing that the yuan would not exhibit a sustained depreciation, the market is very nervous,” he said.

The yuan lost 3.5 percent in China in the past two days and around 4.8 percent in global markets.

The devaluation Tuesday came after a series of weak economic data and generated suspicions that China is He is embarking on a longer-term decline in the exchange rate. This was the largest drop the yuan in a day since 1994.

A cheaper yuan may help Chinese exports, making them less expensive in foreign markets. Last week, data showed a fall of 8.3 percent in exports in July, while producer prices are in their fourth year of deflation.

The Ministry of Commerce of China recognized today that the depreciation would have a stimulating effect on exports. Data released later on Wednesday underlined off expansion in the world’s second largest economy.

The growth of factory output yielded to 6 percent in July over the same month last year, in breach of market forecasts, while fixed asset investment and retail sales were also weaker than expected.

Ministry of Finance data showed an increase in government spending of 24.1 percent in July , reflecting Beijing’s efforts to stimulate economic activity. (Reuters) .