Most Asian currencies remained subdued and equities were volatile on Tuesday as the Chinese yuan skidded to a near 15-year low amid worries about Beijing’s policy direction.

Investors across the region were jittery after Monday’s broad sell-off, which was sparked by fears that President Xi Jinping’s new leadership team could prioritise state over the private sector in Asia’s largest economy.

The yuan fell for the third straight session to trade close to its December 2007 lows, even as a US business activity report signalled that the US Federal Reserve’s rate hikes had started to take effect and that it might raise less than expected at its next meeting.

The yuan has now lost 13% on a year-to-date basis, and is also one of the weaker performing units across Asia Pacific. Chinese shares pared early gains to fall 0.1%.

Reuters exclusively reported China’s foreign exchange regulator had sent a survey to a few banks to know about their positioning in the currency markets, in the face of a steep decline in the currency.

“Investors’ caution over the outlook for the Chinese economy, is working in favour of a weaker yuan over the next few months,” Moh Siong Sim, an FX strategist with the Bank of Singapore said.

The Taiwan dollar, the Thai baht and the Indonesian rupiah fell between 0.1% and 0.2%.

The Singapore dollar also traded marginally lower, with the island-nation reporting a 5.3% rise in September consumer prices, beating a Reuters poll estimate of 5.2%.

Asian currencies mixed in thin trading, Chinese yuan falls most

“As growth risks intensify and with Monetary Authority of Singapore inflation forecast bands for 2023 setting a bigger hurdle for upside surprises, we do not factor in additional MAS tightening in our baseline projections,” analysts from Goldman Sachs said in a note.

However, the Vietnamese dong gained marginally about 0.1%, after its central bank raised its key policy rates by 100 basis points, days after the Southeast Asian nation voluntarily devalued its currency to reflect fluctuations in the global market.

The South Korean won and the Philippine peso notched gains of 0.5% and 0.1%, respectively.

Meanwhile, Asian stocks remained choppy, with markets in Thailand, Singapore and Philippines gaining between 0.2% and 0.7%, while stocks in South Korea Taiwan and Indonesia down between 0.1% and 1.4%.

Highlights:

** Indonesia’s benchmark 10-year yield down to 7.651%

** Vietnam party chief to visit China’s Xi next week

** Indian shares flat; weaker Asia, Fed outlook weigh