The central parity rate of the Chinese currency renminbi, or the yuan, advanced to 25-month high on Tuesday in the wake of a weak U.S. dollar.
The yuan strengthened 202 basis points to 6.4372 against the U.S. dollar Tuesday, according to the China Foreign Exchange Trade System.
The strong reading came after the dollar index, a gauge that measures the U.S. currency's strength against six other major currencies, staged consistent declines over the past trading days.
Analysts expected the yuan to gain further in the coming days on the back of a solid fundamental of the Chinese economy and the estimation of a weaker U.S. dollar in the future.
In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day.
The central parity rate of the yuan against the U.S. dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.