China’s stock markets continued to decline in early trading on Tuesday, as major stock indexes slumped more than 6 percent to 8-month lows. The Shanghai Composite Index lost 4.8 percent to 3,057.04 points by 0200 GMT.
As a result, China’s yuan weakened against the dollar after closing at its weakest level since 2011 on Monday, hit by another slump in the mainland’s stock market and a weak central bank midpoint.
The People’s Bank of China (PBOC) set the midpoint rate at 6.3987 per dollar prior to market open, 0.2 percent weaker than the previous fix of 6.3862.
The spot market opened at 6.4149 per dollar and was changing hands at 6.4109 at midday, 0.1 percent weaker than the previous close.
Offshore yuan was trading 0.92 percent weaker than the onshore spot at 6.4705 per dollar by midday.
The PBOC made a large 150 billion yuan ($23.43 billion) injection into the interbank market on Tuesday morning via its regular open market operations.
However, similar large injections last week had little impact on stock market sentiment as the funds only remain in the market for seven days.
After a year of heady gains, Chinese markets have been buffeted by increasing signs that economic growth is faltering, and the central government’s efforts to reassure and backstop stock investors have been sunk by a succession of weakening indicators.