The central parity rate of the Chinese yuan rallied against the US dollar on Tuesday after it dipped for 10 trading days in a row, the longest period of consecutive fall since 2008.
The yuan rate advanced by 10 basis points to 6.374 against the US dollar, according to the China Foreign Exchange Trading System.
The yuan also strengthened against other major currencies, including the euro, Japanese yen and British pound, the Global Times reported.
Before Tuesday's rally, the Chinese currency lost 596 basis points, or 0.94 percent, against the greenback in ten trading days.
Official data over the weekend showed that China's new yuan funds outstanding for foreign exchange, ended a four-month decline in October.
The improvement indicated that foreign capital is coming back to China after the US Federal Reserve did not hike interest rates as anticipated, partly contributing to the stabilisation of the yuan.
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The International Monetary Fund is expected to make its decision this month on whether to include the yuan in its Special Drawing Rights (SDR) basket, which will make the yuan more of an international currency.
"The SDR inclusion will help prop up the yuan in the medium term," said a latest report by the investment bank CICC. It is predicted that the yuan versus US dollar will probably stabilise at 6.5 at the end of 2016.