China has allowed the value of its currency to drop for a second consecutive day, repeating a surprise move Tuesday that rattled global markets and could raise tensions with its trade competitors.
The Chinese yuan's value fell 1.6 percent Wednesday after falling nearly 2 percent a day earlier, which was its biggest single-day drop in a decade.
China's central bank, which strictly controls the currency, described the move as temporary and meant to make the value of the yuan more market-oriented.
"Looking at the international and domestic economic situation, currently there is no basis for a sustained depreciation trend for the yuan," the bank said Wednesday.
The decision could spur growth and boost China's exporters. A cheaper yuan makes the nation’s exports less expensive and more competitive.
There are fears the decision could prompt other nations to devalue their currencies. Those concerns were heightened Wednesday when Vietnam allowed its currency, the dong, to weaken.