"If the renminbi exchange rate against the dollar stabilizes or it depreciates, this will have some effect on trade, although the exchange rate is not the most crucial factor," Freeman said.

The renminbi will likely now be "managed without any official bias in the direction of the next big move" in its valuation, said Callum Henderson, global head of FX Research at Standard Chartered Bank.

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.

China and the US have been locked in a dispute over the yuan's value. US politicians claim itgives 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.

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