Yuan extends losing streak for record ninth straight week ahead of devaluation anniversary

China’s yuan is set to extend its record weekly losing streak on Friday, three years after the nation attempted to reform the exchange rate that had sent shock waves across the global stock and currency markets.

The People’s Bank of China devalued the yuan by nearly 3 per cent against the US dollar in two days from August 11, 2015, a move it said was a free-market reform but had sparked market concerns that it was engaging in a currency war to boost competitiveness of its exports.

Since then, the central bank has imposed harsh capital controls, squeezed interest rates and burned through nearly US$320 billion of its foreign currency reserves to support the currency and quell market panic.

On Friday, the yuan dropped 0.46 per cent to 6.7751 per dollar, heading for its ninth week of declines, weighed by a crisis in Turkey that is causing traders to offload risky emerging markets and Asian currencies while buying the safe-haven US dollar.

The lira tumbled to another fresh record low because of mounting concerns about Turkey’s authoritarian trajectory under President Recep Tayyip Erdogan and a deteriorating economy.

While China’s worsening current account position also points to a longer term slide in the exchange rate, analysts say the depreciation was more manageable and disorderly capital outflows were not evident this time round.