The renminbi has rebounded moderately since late July, thanks to a slight improvement in the external environment and rising market confidence boosted by a number of economic stimulus measures, and this trend is likely to extend into the following months, experts said.

The onshore USD/CNY briefly touched 7.115 in morning trade on Monday, the highest level in a month.

This followed the Chinese currency's 296-basis-point rally in the onshore market to close at 7.215 against the dollar on Friday. The offshore RMB, meanwhile, spiked 859 basis points to end at 7.1658 per dollar the same day.

Data from market tracker Wind Info showed that the onshore USD/CNY pair has risen 0.84 percent from July 25 to Friday, while the offshore RMB has gained 1.7 percent during the same period.

Both indicators are now almost at the same level as at the beginning of the year.

The slide of the US dollar, which shed 1.22 percent on Monday, has been one major reason for the stronger performance of the renminbi, or Chinese yuan.

Recent weak US economic data, combined with a likely interest rate reduction by the US Federal Reserve, have provided more flexibility for China's monetary policies, experts from AVIC Securities said.

The lower-than-expected US economic data and the volatile performance of the US markets during the previous week shook the global capital market on Monday. Japan's Nikkei 225 plunged 12.4 percent to report the biggest single-day slide in 34 years. FTSE 100 and Stoxx 600, major benchmarks in Europe, both shed over 2 percent when market opened on Monday.

Changes have been taking shape in the external market to favor the RMB since July, said Li Liuyang, a forex analyst at investment bank China International Capital Corp. As US inflation cools, market expectations for the US Fed to cut interest rates in September have risen. As a result, US bond yields and the US dollar index have fallen, providing support for the RMB's exchange rate to some extent, Li said.

Zhong Zhengsheng, chief economist at Ping An Securities, said that the RMB's value for carry trade has been quite noticeable this year thanks to its lower volatility, pushing up the Chinese currency's value to some extent.

Carry trades refer to borrowing at low interest rates to invest in an asset that provides a higher rate of return.

Meanwhile, a number of policies to stabilize economic growth and the RMB's value have boosted confidence in the foreign exchange market, said Zhong.

The People's Bank of China, the country's central bank, announced a reduction in the reverse repo rate and the medium-term lending facility rate late last month. State-owned banks have also collectively lowered their deposit rates.

The National Development and Reform Commission arranged about 300 billion yuan ($42 billion) of ultra-long-term special government bonds to support large-scale equipment upgrades and trade-in of consumer goods.

These are strong signals that will further stabilize growth, which is crucial to a stable RMB, Zhong added.

In a work meeting held on Thursday, the PBOC said efforts will be made to firmly guard against the risk of over-adjustment in foreign exchange rates.

The State Administration of Foreign Exchange also said on the same day that it will step up efforts to stabilize market expectations and foreign exchange market performance.

Zhong said the CNH Hibor, the reference rate for RMB lending between banks in Hong Kong, rose to an average level of 3.3 percent in July, up from less than 2 percent a month earlier.

Given the RMB's ample liquidity in the offshore market, the cost of shorting RMB has risen, helping to effectively control the currency's depreciation, he said.

JPMorgan China's Chief Economist Zhu Haibin said a country that undergoes high inflation will face higher currency depreciation pressure. However, China does not fall into that bracket as its inflation rate has kept low, he said.

Wen Bin, chief economist of China Minsheng Bank, said overseas investors' willingness to be exposed to RMB assets has been increasing. The appeal of RMB assets will further go up once the Fed starts to lower interest rates.

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