Renminbi is coming again to the focus of FX commentary around the world as it weakens close to 1%, since IMF decided to include it in its currency reserve basket, giving it more weightage than Pound and Yen.

Lack of intervention and increased outflow is to blame for it. Further weakness in commodity prices have raised fears that it might be indicating a further slowing Chinese demand. Moreover, some positive bets are getting reversed, which had hoped Renminbi would rise after IMF decision.

Yuan has suffered its biggest drop today since November, as price opened at low 6.4162 and now trading at session high of 6.445 per Dollar. Since November it has depreciated steadily from 6.32 per Dollar to current level, highest since 2011. Yesterday, PBoC had set the reference rate to highest level since 2011, past August turmoil high, however spot traded below august level, which got broken today.

Offshore Yuan, which trades mostly at Hong Kong, depreciated to 6.521 per Dollar, increasing the basis to as high as 770 points. However it has eased somewhat now, trading at 6.516 per Dollar. Despite the rise in basis, depreciation pressure is more at home than in Hong Kong.

Any sharp depreciation in Yuan could further dent confidence across globe.