China has set the guiding rate for its currency, the yuan, lower for the third consecutive day.
According to multiple news outlets, the People’s Bank of China set its goal Thursday at 6.4010 yuan per dollar, a 1.1 percent drop from Wednesday’s rate, a smaller amount than the 2 percent declines on each of the previous two days.
The bank had said Tuesday that it would start using a new formula for calculating its guiding rate, the target around which it will allow trading fluctuations.
The new formula pays more attention to market forces and currency trading, making the yuan something more like a floating currency such as the U.S. dollar and the British pound.
But such a philosophy will almost certainly result in a declining yuan, contrary to the last several years of Beijing’s currency policy of having it rise in value.
That policy was the result of years of political pressure, much of it from the U.S., accusing China of keeping its currency artificially cheap, the better the boost exports and discourage imports.
SEE ALSO: China’s yuan devaluation: Beijing’s currency moves explained
China’s devaluations, a response to relatively sluggish growth at home, triggered concerns over a currency war and several of China’s Asian neighbors, particularly Australia and South Korea, saw their moneys decline in value as well.
• Victor Morton can be reached at vmorton@washingtontimes.com.
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