“I do not think we should see the devaluation as a bad thing for the global economy and global growth,” Mr Robert Minikin, head of Asia foreign-exchange strategy at Standard Chartered Bank in London. “To the extent that it is an orderly, contained adjustment, and it is actually brings us toward a more reasonable set of FX rates, it could actually be a healthy development.”
The yuan weakening will create winners and losers. A cheaper yuan could cost trading partners in Asia, whose goods become less competitive when their currencies become more expensive against China’s. That effect could be offset if China’s move boosts its export performance, causing positive reverberations throughout the supply chain.