In addition, Carr says the PBOC is shifting to a more market-based system in order to comply with the International Monetary Fund's special drawing rights requirements.

"This means an end to the previous policy of propping up the currency in order to qualify for the SDR, which was becoming increasingly expensive, leading to further depreciation pressure on the renminbi, higher potential capital outflows, and greater competitive threats from Chinese exports and companies," she says.

Robert Davis, senior portfolio manager of Brussels-based NN Investment Partners, says the impact of the renminbi depreciation for European investors would depend on the motivation behind it.

On the one hand, the renminbi depreciation could be related to the IMF's desire to see a more market-based mechanism for calculating the daily "fix" foreign exchange level. If this is the case, Davis expects the currency move and its implications to be fairly modest.

At the other extreme, China could be using foreign exchange as an easing measure specifically to improve its export competitiveness, which is possible since recent export data have been so weak, he says.

"I think Chinese policymakers are aware of this, and so my expectation at the moment is that the devaluation is related to the IMF SDR issues and will be fairly limited. In either case, though, on a relative basis China is well-placed compared with its Asian and emerging market peers and particularly those that are commodity dependent, as this is also clearly bearish for commodity pricing," Davis adds.

Mao Lei, an assistant professor of finance at Warwick Business School, says that the depreciation shows that the Chinese government is not giving up on export revenue when making its 13th Five-Year Plan (2016-2020).

"Though it is not a good long-term solution for the country's slowing growth, to reach a good nominal GDP growth number for 2015, the Chinese government appears to be switching back to its old growth mode. Other emerging countries will feel the pressure," Mao adds.

David Dollar, a senior fellow at the Brookings Institution's John L Thornton China Center in Washington, says: "I think the 1.9 percent is too small to make much difference. I think that's why the key issue is where it goes from here.

"If it turns into a significant devaluation trend - significant would be 10 percent or more - that would have a significant effect on trade, but it would also generate a lot of tension between China and the United States."

Contact the writers through cecily.liu@chinadaily.com.cn.