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Yao Wei, China economist at Societe Generale SA, said the central bank's move is a significant gesture showing China's commitment to liberalizing the exchange rate.
It also probably aims to reassure China's trading partners, especially the US in an election year, of its commitment to normalizing its currency regime, she added.
There is room for yuan appreciation in the second half of the year and it could hit 6.22, Yao said.
Wei Jianguo, a former deputy minister of commerce seemed to rule out short-term gains.
"The yuan is highly unlikely to gain much in the short term because the trade surplus will continue to narrow."
The currency has fallen 0.3 percent against the dollar since the beginning of the year.
China and the US have been locked in a dispute over the yuan's value. US politicians claim it gives an unfair advantage to Chinese exports.
The yuan has risen more than 8 percent against the dollar since June 2010 when Beijing relaxed a de facto peg to the US currency, imposed in 2008 to protect its exporters during the global financial crisis.
"Economic growth in China in the first quarter of 2012 stood at only 8.1 percent, falling short of market expectations," said Cheung Woon-chuen, president of the Emperor International Exchange (Hong Kong).
"Against the backdrop of weakening growth, I anticipate yuan appreciation will only be 1 to 2 percent in 2012."
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Ding Qingfen in Beijing and Diao Ying in London contributed to this story.