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Shares in banks and asset managers also fell, and the Euro STOXX Volatility Index rose to its highest since late 2011 – more evidence of investor unease.

Rupee decreased to below the Rs 66 level against the dollar for the first time in nearly two years in opening trade today.

In addition, the PBOC is reducing the reserve requirements (RRR) for most big banks from 18.5 percent to 18.0 percent.

It also increased the amount of money available for lending by reducing the minimum reserves banks are required to hold by 0.5%.

China has sought to calm its panic-stricken stock markets by cutting interest rates and loosening constraints on bank lending after a second day of plunging share prices.

The speed at which this happened yesterday was eerily reminiscent of the May 6, 2010 flash crash, as bids seemingly disappeared only to resurface as fast as they vanished.

Some people on Twitter called it “Black Monday”.

The cause of the global market volatility centres on fears that the world’s second biggest economy is slowing. “And I don’t see any signs of meaningful government intervention”.

The local unit has shed almost 15 percent of its value against the dollar this year, pressured like other commodity currencies by slowing growth in the world’s second largest economy, as well as expectations that U.S. rates will soon rise.

Fears that Chinese growth is weakening dragging down the global economy with it are already hammering commodities and world stock markets. For years, investors have been fretting that the market could drop sharply when the central bank starts raising rates.

Japan’s Nikkei 225 Index dropped by 4.61% to 18,540.68.

Many traders had hoped that such support measures, which could include an interest rate cut, would have come from Beijing over the weekend after its main stocks markets slumped 11 percent last week. The world’s second-largest economy moved two weeks ago to devalue its...

Play video “China’s Economy: What Happened?”

The minutes to the July 28-29 meeting of the policy-setting Federal Open Market Committee, released last week, showed both a caution over still-low inflation and a concern over China’s economic malaise.

Many traders had hoped Beijing would take support measures, such as an interest rate cut, over the weekend after China’s main stocks markets slumped 11 percent last week.