Yuan depreciated against Dollar for sixth consecutive day, officially, as People's Bank of China, fixed it weaker. Yuan in onshore market, traded as high as 6.485, per Dollar and currently at 6.475. Offshore Yuan, weaker by 0.3%, trading at 6.548 per Dollar. Offshore-onshore basis has widened to 10.1 points, highest since August turmoil.

Widening partially might be reflecting, outflow pressure as well as Dollar demand in offshore market, which is mainly Hong Kong. Large outflows ahead of FED meeting also can't be ruled out since, data from PBoC showed, China's FX reserve shrank by $87 billion in November, despite large $54.1 billion current account surplus.

While, there are some signs of panic, especially in the emerging markets, in response to Yuan's steady depreciation, market has largely ignored PBoC's change in approach to Yuan. Since August, this shift has actually fastened up.

In August, with single day devaluation of 1.9%, PBoC fist announced that it will set the central parity taking into account spot rates of Yuan previous day as well as change in other currencies.

PBoC while kept the Yuan in tight grip prior to the International Monetary Fund's (IMF) decision to include Yuan to its Special Drawing Right (SDR) basket, it has loosened its grip after Yuan achieved a higher weightage in the basket than Pound and Yen.

Late last Friday, it has announced a significant change, which got largely unnoticed by broader market as focus is on rate hike from FED. PBoC, with collaboration to China Foreign Exchange Trade System (CFETS), has launched Renminbi trade weighted index, similar to very popular Dollar index.

Renminbi index, will have dollar weightage of 26.4%, Euro of 21.39%, 14.68% for Yen, 6.55% for Hong Kong Dollar, 6.27% for Aussie and 24.71% for eight other currencies (shown in figure).

With USD weightage just at 26.4% and only few points ahead of Euro, PBoC might be shifting away from its Dollar-de-facto peg policy, which has cost it higher exchange rate against almost every other pair since mid-2014.

It is still though a function of time, whether PBoC can continue its new mojo, as depreciation against Dollar, in line with other global pairs might lead to greater outflows. If PBoC does keep its nerve steady with Yuan depreciation, we might be looking into the beginning of new era in Chinese monetary policies.