The People’s Bank of China set its daily reference rate at 7.0039 per dollar, the weakest since Apr 21, 2008.
Though the yuan breached the “psychological level” of 7.0 this week for the first time since May 2008, the mid-point fixing previously hadn’t.
Indeed, the Chinese central bank set the yuan fixing at 6.9683 on Tuesday, stronger than the Reuters estimate of 6.9736.
The move was seen as an effort to slow the depreciation after the US labeled China as a currency manipulator.
China’s daily fixing has been closely watched this week after a weak reference rate on Monday resulted in the sharpest drop in the Chinese currency since 2015.
As a result, there are concerns about a global currency war and devaluation of emerging market currencies—especially Asian countries that have close trade ties with China.
Central banks in New Zealand, India and Thailand announced surprise rate cuts on Wednesday, in response to the escalating US-China trade war and its possible impact on the global economy.
The yuan is allowed to move 2% in either direction of the fixing, which is at 9:15am on every trading day after a group of 14 lenders send in their rates.