China's Central Bank has cut the guiding rate for the national currency, the yuan was cut by 1.9 per cent on Tuesday and another 1 per cent on Wednesday.
The Central Bank has reassured people that it is not the start of a sustained depreciation.
The new rate is meant to boost exports because figures released at the weekend showed Chinese exports fell more than 8% in July.
BBC reports that the action on the yuan has sparked fears of a global and destabilising "currency war"
In a statement, the Central Bank said "Looking at the international and domestic economic situation, currently there is no basis for a sustained depreciation trend for the yuan."
The fall in currency is projected to catalyse competition among Chinese exporters.
