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By Bloomberg

China’s yuan fell to the weakest level in 2015 as the nation’s stocks plunged after three of its biggest brokerages were suspended from adding margin-trading accounts.

The Shanghai Composite Index tumbled 7.7 percent Monday, the most since 2008, as Chinese regulators tightened control of margin investments after equities surged 63 percent in six months. Yuan positions on the People’s Bank of China’s balance sheet, a barometer of capital flows, fell 128.9 billion yuan ($20.7 billion) in December from a month earlier, the biggest drop since 2003, data showed. Greece will hold elections on Jan. 25 and the European Central Bank will meet this week.

“The Chinese stock rally is seen by policy makers as too steep, and hence they are moving to cool things down,” said Daniel Chan, a Hong Kong-based analyst at Brilliant & Bright Investment Consultancy Ltd. “Together with the uncertainty ahead in Europe, demand for dollars is going to be strong. These are all weighing on the yuan’s near-term outlook.”

The yuan declined 0.22 percent to close at 6.2203 a dollar in Shanghai, extending a two-day drop to 0.52 percent, China Foreign Exchange Trade System prices show. It fell to 6.2249 earlier Monday, the weakest level since Dec. 30.

The People’s Bank of China cut the yuan’s reference rate by 0.07 percent, the biggest reduction in two weeks, to 6.1230 a dollar. The onshore spot price was 1.56 percent lower than the fixing, within the 2 percent permitted trading range.

Property Prices

New-home prices retreated in 65 of the 70 Chinese cities tracked by the government in December, compared with drops in 67 cities in the previous month, the National Bureau of Statistics said Sunday. The government is scheduled to release data Tuesday on retail sales, industrial production and last quarter’s gross domestic product.

China’s holdings of U.S. government debt declined in November for a third straight month to $1.25 trillion, the lowest level since January 2013, according to U.S. Treasury Department data released Jan. 16 in Washington. China remains the largest foreign holder of Treasuries.

In offshore trading in Hong Kong, the yuan gained 0.17 percent to 6.2256 a dollar, after tumbling 0.6 percent on Jan. 16 in the steepest drop since 2011, data compiled by Bloomberg show. Twelve-month non-deliverable forwards rose 0.14 percent to 6.3230, 1.6 percent lower than the Shanghai spot rate.