As China's yuan heads toward its steepest ever weekly loss, some analysts told CNBC investors could be underestimating the importance of the move.
The tightly controlled currency has fallen 0.8 percent so far this week and is heading towards its biggest weekly fall on record, Reuters reported. Many have interpreted the move as a signal that Beijing is on the cusp of widening its trading band and taking a step towards liberalization.
"This is manufactured by the People's Bank of China (PBOC), there's no question about it," Uwe Parpart, the head of research at Reorient Financial Markets, told CNBC.
Parpart told CNBC the Chinese government was deliberately calling attention to their currency ahead of the National People's Conference in early March, where decisions will be firmed up on the reforms outlined in Third Plenum meeting in November.
"Some of this stuff is going to happen and we think there's a pretty good chance that some time in the near future we will get a widening of the yuan band from 1 percent to 2 percent," he said.
The currency is currently allowed to rise or fall by 1 percent in either direction from a level fixed against the dollar set by the PBOC.
But according to Richard Jerram, chief economist at Bank of Singapore, analysts could be underestimating the full extent of the drivers behind the recent weakness.
(Read More: Is China getting ready to widen the yuan's band?)
"Nearly every commentator out there is reading this as a deliberate move by the People's Bank of China to introduce two-way risk, and as a prelude to widening the trading band, but I think they are being complacent over the reasons for the move," said Jerram.
"It could be that China is responding to the loss of some of its competitiveness as other Asian currencies weaken. If that is the case then it would suggest that the policy change signals some trouble in the region in terms of a growth problem," he added.