Q&A: What's behind the China's yuan devaluation

[...] the prospect that it will force the Federal Reserve to rethink a widely expected U.S. interest rate hike this year — a possibility that creates uncertainties for financial markets.

Beijing doesn't let buying and selling in financial markets set its exchange rate the way the United States and other developed countries do.

China says the devaluation was part of an effort to give market forces a bigger say in the exchange rate — something the United States and the International Monetary Fund have long called for.

Chinese people, worried about the economy and seeking investment opportunities abroad, have been pulling money out of the country.

[...] the IMF is forecasting 6.8 percent economic growth in China this year, the slowest rate since 1990.

Shares in exporters such as Caterpillar and General Electric fell in the market rout this week, though many economists say the yuan's drop so far isn't significant enough to do much damage.

[...] the Chinese devaluation complicates the Fed's decision-making.

The U.S. central bank, increasingly confident in the strength of the U.S. economy, is expected to raise the short-term rate it controls later this year.