PERTH, Aug 12 (Reuters) - Australia's central bank is watching China's devaluation of the yuan very closely as it could set off a chain reaction of events that would be difficult to predict, a top official said on Wednesday.
Reserve Bank of Australia (RBA) Deputy Governor Philip Lowe said the implications of China's surprise move for Australia depended on how you interpreted Beijing's motivation.
It could be a negative if the shift was a reflection of slowing economic growth, but if it represented an unwinding of previous appreciation and a move towards market liberalisation, then it was likely to be all for the good.