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China plays with fire by drawing on currency card

Weaker yuan reemerges as trigger in US tensions

An unexpected devaluation of the yuan in 2015 resulted in capital flight.   © Reuters

TOKYO -- China's central bank has weakened its reference rate for the yuan for a second day amid rising tensions with the U.S., stoking market concerns of capital flight and a rekindled trade war.

The People's Bank of China on Tuesday set its central parity rate for the yuan to 7.1293 against the dollar, responding to downward pressures in the market. The bank had just brought the rate to its weakest in more than 12 years the day before.

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