Chinese yuan devaluation panics world markets

Chinese yuan devaluation panics world markets

In an effort to boost its sinking economy, China decided to devalue the yuan.  “China devalued the yuan last week and shifted to a more market oriented exchange rate sending the currency into the biggest decline in two decades”, according to Bloomberg. The world markets are plunging in response. “China could be forced to devalue the yuan even more, should its economy falter, and the equity markets are dealing with the prospect of a weaker yuan amplifying the negative impact from a sluggish Chinese economy,” said Eiji Kinouchi, chief technical analyst at Daiwa Securities in Tokyo.