The curious case of China’s falling yuan

The Chinese currency has had its biggest one-day fall, down nearly 1%, and has fallen 1.5% for the past week and a half. It is the biggest decline since 2005 when it introduced its new currency regime and moved away from a tight peg against the US dollar.
Dropping to 6.1 yuan to the dollar, the currency has broken a long-term trend of appreciation. Recall that it had been around 8 yuan to the dollar in 1994 when the exchange rate was set up.
The Chinese central bank, the People’s Bank of China (PBOC), is right in that these are not big moves in the foreign exchange market. In a statement, the PBOC says this volatility is normal for other economies so there’s “no need to over-interpret it.”