The Chinese yuan hit a fresh 16-month low against the U.S. dollar on Friday and while it may resume an appreciation trend, analysts say the currency's days as a steady one-way bet are over.
The renminbi fell as low as 6.2532 to the dollar, extending this week's fall.
It has lost over 3 percent against the greenback this year as investors anticipated a widening of the currency's trading band. China's central bank controls the yuan by setting a daily midpoint from which it can rise or fall by a certain amount. In mid-March, the central bank doubled that amount - the trading band - to 2 percent.
Robert Minikin, senior FX strategist at Standard Chartered told CNBC the yuan's recent depreciation marked the start of a "new FX regime" for China.
"Greater volatility in spot is the new normal," said Minikin.
While Minikin still expects the renminbi to resume a mild appreciation path soon, he said it would be interrupted by bouts of volatility.
"We've got to except now that that appreciation trend will be dominated by the month-to-month, quarter-to-year, even year-to-year swings in the value of the Chinese currency," he added.