The exchange rate of the euro against the yuan tumbled to its lowest point in a decade at 7.8922 on Wednesday, according to the People's Bank of China's website.
The central bank has set the central parity rate, a reference rate, of euro to yuan at 266 basis points lower from 7.9188 the previous day. The euro fell by 544 basis points, or 6.8 percent in the last two days against the yuan. The currency’s exchange rate went above 8 last week.
A deteriorating crisis in Spain’s banking system and a downgrade from credit rating agency Egan-Jones Ratings is aggravating investors' worries of the possible spread of the crisis in Europe.
The exchange rate of the euro against the US dollar also experienced its largest monthly fall since September 2011 to 1.2460.
Considering a strong US dollar against the euro amid the ongoing crisis in Europe, analysts said it is highly possible that the euro may continue weakening against the yuan.