SHANGHAI: China’s central bank on Friday cut the yuan’s value against the greenback to its lowest in more than four years, only a week after the International Monetary Fund (IMF) welcomed the unit into its elite reserve currency basket.

The People’s Bank of China (PBoC) set the daily reference at 6.4358 yuan to $1.0, the lowest since August 5, 2011, the China Foreign Exchange Trade System showed.

The yuan fixing — ahead of the US Federal Reserve’s interest rate decision, which is widely expected to see a landmark rise — also saw the normally stable currency down 0.8 per cent in a week, its biggest seven-day drop since August.

Then, China devalued it by almost five percent in a week in what it said was a push to make it more market-oriented.

The IMF announcement last week was a symbolic marker in China’s efforts to become a global economic power, and came despite Beijing keeping tight controls on the yuan, including only allowing it to move up or down two percent against the US dollar from the mid-rate set daily by the central bank.

Pressure on the yuan since the August move has prompted Beijing to sell dollars to support the currency, with its foreign exchange reserves falling to $3.44 trillion in November, their lowest level in nearly three years.

Published in Dawn, December 12th, 2015