The yuan central parity rate announced by the China Foreign Exchange Trading System (CFETS) stood at 6.2298 against the greenback on Tuesday compared to 6.1162 on August 11th, down nearly 2 percent, the lowest level since April, 2013.
It was a step toward internationalizing the yuan. The People's Bank of China said that it will base the yuan-dollar exchange rate more on the previous day's closing rate at the interbank foreign exchange market.
The impact of the yuan's devaluation has yet to affect the day-to-day life of ordinary people, but the following groups will experience firsthand the good and bad effects of the yuan devaluation.
No 8 Stock investors
As yuan devaluates the stock market may also take a downward turn. The devaluation will cause depreciation of yuan-based assets, and financial and property stocks will suffer. Furthermore, the expectation of long-term depreciation of yuan will lead to outflow of hot money, which may tighten liquidity and drag down the index.
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Investors look downcast at a brokerage house in Fuyang city, East China's Anhui province, July 28, 2015. [Photo/IC] |
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