China's currency has weakened to its lowest point in more than a decade, prompting the US to label Beijing a currency manipulator. ... On Monday, the People's Bank of China (PBOC) said the slump in the yuan was driven by "unilateralism and trade protectionism measures and the imposition of tariff increases on China".

How does a country devalue its currency?

Devaluation occurs when a government wishes to increase its balance of trade (exports minus imports) by decreasing the relative value of its currency. ... By making its own currency cheaper, the country can boost exports. At the same time, foreign products become more expensive, so imports fall.

Why is Chinese currency dropping?

China is tolerating a gradual weakening of the yuan's value against a basket of major currencies because of a worsening political confrontation with the United States and a challenging economic outlook, analysts said. ... As of Tuesday, it had strengthened to trade at 7.0750 against the US dollar.