The offshore yuan weakened to its lowest level since September 2011.
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Since the official close of 6.5172 per dollar, the yuan extended declines by 0.29 percent to 6.5350 at 8:27 p.m.in Shanghai, bringing the drop on Monday to 0.65 percent, according to China Foreign Exchange Trade System prices.
Still, the yuan’s closing rates will be the level at which it is quoted at 16h30, at around 6,5190 yesterday.
Nonetheless Beijing rigidly controls the unit, including only allowing it to move up or down two percent against the United States dollar from the mid-rate set daily by the central bank.
“The authorities will try to calm down any market expectations of a fast depreciation of the yuan”, said Zhou Hao, an economist at Commerzbank AG in Singapore.
The yuan and China’s stock markets slumped on Monday as surveys showed its factory activity continued to contract, reviving fears of a global economic slowdown.
The offshore yuantraded in Hong Kong fell 0.15 percent to a five-year low of 6.6361 a dollar.
China’s onshore yuan softened against the dollar on Monday to its weakest level since April 2011 after the central bank set the guidance rate at a more than 4-1/2-year low.
After the International Monetary Fund inclusion, the country s central bank signalled it may loosen the yuan s peg to the U.S. dollar, measuring it instead against a basket of currencies of its major trading partners.
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The Chinese government will take a “strong policy response” to diminish hard-landing worries and restore investor confidence, Prakash Sakpal, a Singapore-based economist at ING Groep NV, wrote in a note Tuesday.
