After Brexit, China devalues yuan by almost 1% today amid dollar surge

Reacting to the US dollar’s surge after the UK voters decided to leave the European Union last Friday, Chinese policymakers taking an evasive action today decided to weaken the yuan by almost one percent, the biggest downward revision since August.

The People’s Bank of China (PBoC) set the value of the yuan — also known as the renminbi — at 6.6375 to the greenback, down 0.91 percent from Friday’s fixing, according to data from the Foreign Exchange Trade System, a report said.

The sharp depreciation in China’s currency is the largest since the country’s devaluation last year, when the move triggered a nearly 5 percent drop in yuan over a week, rattling global investors.

Monday’s fix was the lowest level since 23 December, 2010.

The dollar surged Friday after Britain’s historic vote to withdraw from the EU sent shudders through world markets as investors fear it will hammer the global economy.

The PBoC said at the time that China had prepared a contingency plan for the British vote and would further improve the yuan rate system to keep the unit “basically stable”.

But analyst warned of more gyrations.

“There will be further volatility to come,” Khoon Goh, head of Asia research at Australia & New Zealand Banking Group in Singapore, told Bloomberg News before the reference rate was announced.

The onshore yuan was quoted at 6.6440 in morning trading on Monday, down 0.44 percent from Friday’s close of 6.6148, according to the Foreign Exchange Trade System.

With agency inputs