China yuan falls to lowest since August 2011 versus dollar

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"There really isn't much perceived intervention in the markets," he said at a press conference Friday. Chan believes that the reason the yuan is being allowed to decline now, when the market mechanism shift was officially made in August was due to concerns over whether some debtors would struggle with external debt if the currency declined.

In the intervening months, PBOC data has indicated substantial hedging activity and concern over external debt has subsided somewhat, he said.

Even with the declines, "our view is the currency is still over valued. They want to move closer to fair value, which we perceive to be around 6.80," for the dollar-yuan pair, Chan said. Nomura expects the currency pair will hit that level by the end of 2016.