China deals with aftermath of biggest trade deficit in 22 years

News about the biggest trade deficit in China in more than 20 years prompted the Asian nation's central bank to water down its daily fixing the most in about 18 months, according to Bloomberg.

The renminbi endured its steepest loss in 49 days in the aftermath of the trade deficit news. The deficit totalled $31.5 billion, which is four times as big as the largest on record.

"The first three to four months, you will have a repeat of the 2008 situation where the exchange rate is flat," East Asia head of global currency research Cliff Tan with Bank of Tokyo-Mitsubishi in Hong Kong told Bloomberg. "Once the European problem moves off the front burner, risk-taking will come back and we will see a new pattern of fixing to allow a catch-up with 5 percent annual gains."

Thus far this year, the yuan has lost 0.5 percent of its value against the world's reserve currency, a notable metric considering the monetary unit gained 4.7 percent against the U.S. dollar last year.

The Financial Times reports Zhou Xiaochuan, governor of the People's Bank of China, did not when asked if the institute he leads has opted to halt the yuan's rise.