Breaking: Chinese Goverment Weakens the Yuan Reference Rate by 1.9%!

The Chinese government has now resorted to the yuan's devaluation to bailout the besieged stock market and the economy

From Bloomberg:

China’s central bank weakened its daily reference rate for the yuan by a record 1.9 percent amid signs of a deepening slowdown in the world’s second-largest economy.

The currency tumbled 1 percent to 6.2770 per dollar as of 9:20 a.m. in Hong Kong’s offshore trading, the biggest decline since 2011. Onshore trading begins at 9:30 a.m. and the spot rate is kept within 2 percent of the reference rate.

While weakening of currencies of the other Asian economies have been due to the easing policies mainly designed to support unsustainable debt burdens, the PBoC's devaluation can be seen as a case of "currency war" or to deliberately weaken the currency as subsidy to exporters.

China's exports plunged 8.3% in July as shown above from investing.com and has been stagnating for most of 2015

The above chart represents the nominal dollar based export value from tradingeconomics.com

This may even be in response to the buildup of internal financial pressures as revealed by the recent surge in capital outflows  (FT Alphaville)

The Chinese government must be so distressed for them to adapt one desperate measure after another.