This is the second consecutive day that PBOC has intervened in local currency prices.

After the above news, the MSCI Asia-Pacific index decreased by 1.4%.

China’s Central Bank said it is applying a controlled floating mechanism.

Yesterday, China lowered the reference rate of the yuan (NDT) against the USD, to support growth and exports.

`The Chinese government is focusing on domestic issues rather than international issues. They just want to use all possible tools to stabilize the economy. A weak yuan will cause domestic purchasing power to decline and demand to decline.`

Yuan is heading for the strongest 2-day losing streak since 1994 and is about to return to the August 2011 mark.

Explaining the reason for this morning’s move, PBOC said that because the foreign exchange market fluctuates daily, if the previous day’s closing price fluctuates significantly compared to that day’s reference rate, the next day’s reference will also have to change.

This agency also believes that with the controlled floating mechanism, changes in the RMB reference rate are normal.

When asked whether the RMB may continuously depreciate in the future, PBOC said that according to the financial and economic situation both domestically and internationally, this comment has no basis.

In addition, China has maintained a current payment surplus for a long time, and the process of internationalizing the yuan and opening up the domestic financial market is being promoted.