China is the world’s biggest consumer of commodities.
China’s action has also sparked fears of a currency war that could see other countries lowering their currencies as well to mitigate the negative impact of a weaker yuan on their exports.
Vietnam, for one, has already responded by widening the dong’s trading band against the US dollar to allow its currency to weaken further against the greenback.
Indeed, the devaluation of the yuan has angered many economies, especially the US, whose currency has already been appreciating against almost all major currencies in the world.
US policymakers have condemned China’s move, which they argue could hurt US manufacturers, as it gives China unfair trade advantage.