CFETS RMB Index that was launched by the People’s Bank of China (PBoC) in collaboration with China Foreign Exchange Trade System (CFETS) last year is pointing to a fresh weakness in the Chinese yuan. However, the latest sprout of weakness hasn’t attracted as much attention as the last August, when it was devalued by PBoC against the dollar.

The index, which measures the strength of the yuan against a basket of 13 currencies, declined to 94.11, the lowest reading since its launch. The index has been declining steadily since late last year. This year the index has declined almost 7 percent. It is down more than 11 percent since last August.

The latest weakness in the yuan attracted less attention as the drop has been much smaller against the dollar. Compared to the above figures, the yuan is down just 2.4 percent against the dollar this year and is down just around 4 percent in last 12 months. However, over the medium term this weakness in the yuan likely to get reflected in terms of trade.

We at FxWirePro have already forecasted that the yuan would decline to 7 per dollar. The yuan is currently trading at 6.64 per dollar.