On Thursday, the bank facilitated the yuan's biggest fall in in five months. The People's Bank of China (PBOC) set the official midpoint rate on the yuan 0.5 percent weaker at 6.5646 per dollar, the lowest since March 2011, according to Reuters. The news agency highlighted that it tracked record losses in the more open offshore market for the yuan currency and was the biggest daily fall since last August, at the height of the last equity market storm in China.
There have been discussions in the last few years over whether countries are purposefully debasing their own currencies -- a concern that was termed "currency wars" by Brazil's Finance Minister Guido Mantega in September 2010. A weaker currency can help a country's export-focused companies and - in the case of China - can alleviate greater concerns about stalling growth. Central banks often stress that exchange rates are not a primary policy goal and can be seen more as a positive by-product of monetary easing.
However, if one country devalues its currency it can lead to others following suit. In the case of the U.S. it can lead to a wave of deflation coming from cheaper goods produced in foreign countries. For oil, which is traditionally denominated in the greenback, it can dent demand by making it pricier for domestic consumers.