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China Sets Yuan Rate at Lowest since 2008.

China set its daily yuan reference rate at the weakest level since 2008 after increasing political tensions with the U.S. drove the currency to a seven-month lo.

The People’s Bank of China set the yuan fixing at 7.1209 per dollar. That compares with the 7.122 average estimate in a survey of traders and analysts. The fixing limits the onshore yuan’s moves to just 2% in either direction.   

The offshore rate, which edged toward the weakest level on record last week, was little changed at 7.1502 per dollar on Monday.

The onshore yuan last closed at 7.131 per greenback in Shanghai on Friday. The daily fixing is calculated with formulas that take into account factors such as the previous trading day’s official close at 4:30 p.m, the yuan’s move against a basket of currencies and the moves in other major exchange rates.

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