Beijing wants you to know that the yuan—already at four-and-a-half-year lows against the dollar—may fall further. Just that you shouldn't worry too much about it.
Late on Friday, the China Foreign Exchange Trade System (CFETS), a sub-institutional organization of the People's Bank of China (PBOC), introduced a new exchange rate index that will see the yuan (CNY), or renminbi, valued against a basket of 13 trade-weighted currencies
It isn't clear if the PBOC will ever formally tie the yuan to this gauge but CFETS did say the basket includes both G3 and Asian currencies, such as the Singapore dollar, Thai baht and Hong Kong dollar. Noticeably, it excludes the Korean won, Indian rupee and Taiwan dollar.
A slowdown in China's once-booming economy, growing expectations of tighter monetary policy in the U.S., and capital outflows have all hurt the renminbi recently. The central bank surprised markets in August by devaluing the yuan but that hasn't stopped investors from placing bets on further turmoil. Recent lower fixings against the greenback have also supported that view, with the PBOC setting Monday's midpoint rate at 6.4495 per dollar, the weakest level since 2011.