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The real effective yuan exchange rate continued to fall in July, for a second consecutive month. The value slid nearly 1 percent last month according to statistics released by the Bank for International Settlements.
The nominal effective exchange rate, or its value against a trade-weighted basket of currencies, depreciated nearly 1 and half a percent in July from June. The discrepancy between real and nominal yuan exchange rate shows the different inflation situations between China and its major trade partners -- the US, Japan and the European Union.
Analysts say the drop in the real effective yuan exchange rate is related to the strength of the euro, and the British pound.