Renminbi moved to its weakest level in six years

Renminbi fell to its weakest level against the US dollar since late 2010 on Monday, after the People’s Bank of China weakened its onshore rate by the biggest margin since the one-off devaluation last August in the wake of Shanghai’s summer crash.

The yuan was fixed at CNY 6.6375 per USD, compared with Friday’s peg of CNY 6.55776 - marking the weakest level for the currency since Christmas Eve in 2010.

Renminbi is permitted to move up to 2% above or below the loos peg in onshore trading, while the offshore yuan floats freely.

The sharp shift in the daily fixing was reflective of global currency market volatility after the UK’s surprise decision last week to leave the European Union, which led to a 2.5% rally in the US dollar index on Friday.

“The market should be a little bit disappointed as most of the traders hoped that China’s central bank should offer some sort of ’stability’ amid rising market uncertainties,” said Commerzbank AG emerging markets economist Zhou Hao.

“Undoubtedly, today’s fixing rates hint that the market should be prepared for more volatility.”