China will be able to keep inflows of speculative capital under control even if the latest clarifications on its yuan policy trigger any influx of "hot money", a former central bank adviser has said.

The People's Bank of China, the central bank, said in a statement on Saturday that it will proceed further with the reform of the yuan exchange rate regime to enhance its rate flexibility. The move has been interpreted as the start of allowing the yuan to rise against the US dollar after it remained stable for 23 months.

On Sunday, the central bank said in a statement that it will maintain a stable exchange rate and there will be no drastic fluctuation in the value of the yuan. There will be no one-off adjustment in the value of the yuan and the fluctuation of its value must be "controllable" to prevent market forces from causing excessive swings, it said.

"The basis for large-scale appreciation of the yuan exchange rate does not exist," it said.

The statement emphasized the yuan be pegged to a basket of currencies, adding that the US dollar should not be the only gauge for judging the renminbi exchange rate level.

Keeping the rate at a "reasonable, balanced level" will contribute to economic stability and help restructure the Chinese economy with greater emphasis on services and consumption, it said.

"The stance is clear: The yuan will enter a track of gradual appreciation," said Zhang Xiaojing, an economist with the Chinese Academy of Social Sciences.

"Although depreciation cannot be ruled out given the falling euro, the yuan could rise in the short term."

Still, the approach has triggered concern that more speculative capital, or "hot money", will flow into the country to gain from any continual appreciation of the yuan.

"The possibility is there," said Yu Yongding, a former member of the central bank's monetary policy committee.

"But we should not panic and stop allowing the yuan to get more flexible simply because of that; we can keep it under control by enhancing cross-border capital control," Yu, who is also head of the China Society of World Economics, told China Daily.

"More flexibility does not mean one-way appreciation," he said. "It would be a two-way movement, which would help thwart currency speculation."