China’s yuan fell drastically on Thursday, followed by a hold of the Chinese stock market after just 30 minutes of trading. The currency suffered its largest fall in over five months, and the results have rippled through the global stock markets, The People’s Bank of China (PBOC) also lowered the midpoint rate of the currency down to 6.5646 per dollar, or 0.5%.
This is the lowest level since March 2011.
Analysts state that this is very similar to the abrupt drop of the yuan in August when the currency was devalued by nearly 2%. The PBOC intervened quickly in August and reversed the losses by nearly 1%.
The bank also reaffirmed on Thursday that there is no basis for the continued depreciation of the currency, and stated that the currency remained stable against a basket of currencies in 2015. The yuan has dropped by 3.5% against the yen this week as well as a 0.8% drop against the euro.
Concerns have been raised that China may be contemplating competitive devaluation in an attempt to help exporters in the country that are struggling to maintain profitability. Analysts suggest that while other currencies are falling as well, the ultimate result of the current economic problem caused by China would be greater volatility in the markets.