China devalues yuan currency for third consecutive day

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BEIJING: China cut the reference rate for its currency for the third straight day on Thursday, after the surprise devaluation of the yuan this week unsettled global financial markets.

The central bank put the yuan’s central parity rate at 6.4010 yuan for US$1, the China Foreign Exchange Trade System said, a drop of 1.11% from the previous day’s 6.3306.

It was also lower than Wednesday’s close and comes after China adopted a more market-oriented method of calculating the currency rate in a move widely seen as a devaluation.

The cuts have put financial markets on edge, sparking worries of a “currency war” as other countries feel pressure to devalue and raising questions about the health of the world’s second-largest economy, where growth is already slowing.

Meanwhile, the country’s central bank has dismissed claims that it is trying to engineer a 10pc fall in the yuan as “groundless”, just days after it devalued its currency for the first time in over 20 years.

The People’s Bank of China (PBoC) said strong economic fundamentals and the country’s deep foreign exchange reserves provided “strong support” to the exchange rate.