China may allow the yuan to climb slightly, a UK bank said, after a government think tank urged that the currency's floating rate be widened gradually.

The Chinese currency dipped slightly against the US dollar last week and ended at 6.8271 last Friday, according to the China Foreign Exchange Trade System. The yuan closed at 6.8263 by the end of the previous week.

"China might let the yuan go through a gradual and slight appreciation starting in the middle of this month," Standard Chartered Bank wrote. "This will give time for exporters to adjust to the change."

The bank projected that the daily rate "may rise at a larger pace after several months and the yuan may be depegged from the dollar."

The State Information Center said last Friday China should widen the yuan's daily rate band gradually.

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