The Global financial market held by china has crashed and China economy has slowed down the global markets due to the fall in value of the Chinese yuan to its lowest level in almost a year to trade at 6.22 yuan to the dollar. And Hundreds of billions of dollars have been wiped from the value of shares across global stock markets. This follows a move by the country’s central bank – the People’s Bank of China – which last weekend widened the currency’s trading band to allow it to move up to 2% from the daily midpoint that it sets daily.
There’s speculation that China’s central bank wishes to keep the currency weak to boost the country’s economic growth. The Chinese yuan started the week with losses after the central bank doubled the size of its trading range.The yuan, also known as the Renminbi, was trading at 6.1573 against the dollar in early trading, down 0.1% from Friday. On Saturday, the People’s Bank of China doubled the trading range of the currency.
It is now allowed to rise or fall 2% during a trading session.
This fall is taken to be the worst plunge in China since 2007, and is causing market losses around the world. Investors globally are worried that firms and countries like Nigeria which rely on high demand from China – the world’s second largest economy and the second largest importer of both goods and commercial services – will be deeply affected by the economic slowdown in China.