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The People's Bank of China (PBOC) still had room to manage the currency within its current bands, Zhou told reporters on the sidelines of the annual session of the National People's Congress, China's parliament.

"If market conditions show that the current band is not sufficient, then we could consider whether it is time to widen the band," Zhou said, restating a long-standing position.

He said there were other considerations to bear in mind when judging whether to widen the band but declined to elaborate.

The yuan may rise or fall by 0.3 percent a day against the dollar, and by 3.0 percent against other leading currencies, from a morning midpoint fixed by the PBOC.

The central bank set the yuan's rate on Monday at 7.7403 per dollar, the highest level since China abandoned a dollar peg in July 2005, revalued the currency by 2.1 percent and set it free to float within managed bands.

The yuan has now gained a further 4.75 percent, but that is not enough to satisfy U.S. critics, who say China's record $177.47 billion trade surplus last year proves that Beijing unfairly holds down the currency to give its exporters an advantage in global markets.

With protectionist sentiment rising in the U.S. Congress, the issue is sure to be aired when Treasury Secretary Henry Paulson makes a brief visit to Beijing on Wednesday.

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