Recent yuan weakness stems from the dollar becoming too strong and China should fully utilize the existing trading range, according to a commentary published on Monday in the official People's Daily.

The comments suggest an expansion of the band is "unlikely in the near future", Sacha Tihanyi, a Hong Kong-based currency strategist at Scotiabank, wrote in an emailed note. "We are more likely to see the fixing being used to take the pressure off the band."

A widening is unlikely without sustained pressure on the existing limits, Gareth Berry, a foreign-exchange strategist at UBS AG in Singapore, wrote in a research note last week. The March 2014 expansion was announced after the currency traded within 0.1 percent of the strong end of the allowed range on most days between October 2012 and May 2013. Prior to that, the band was widened in April 2012 from 0.5 percent, and before that from 0.3 percent in May 2007.

More volatile

One-month implied volatility in the yuan climbed to 3.25 percent on Monday, the highest since December 2011, according to data compiled by Bloomberg. That's still the second-lowest reading among 23 emerging-market currencies and compares with 50 percent for Russia's rouble, which is the most volatile. The Hong Kong dollar, which is pegged, is at 0.9 percent.

The yuan dropped 0.75 percent to 6.2510 per dollar in Shanghai last month, following a 2.4 percent loss in 2014. It fell 0.13 percent on Monday. An estimated $110 billion left the country in the last quarter, an acceleration from $82 billion in the previous three months, according to a Jan 15 report by Daiwa Capital Markets.

"It's not a good time to widen the trading range when there's relatively great depreciation pressure for the yuan," said Liu Dongliang, a Shanghai-based analyst at China Merchants Bank Co, the nation's sixth-largest lender. "The market could misread it as a signal that PBOC is allowing further yuan declines. The best time for band widening is when the spot rate trades closer to the reference rate."