The yuan has appreciated 3.6 percent against the US currency so far this year, underpinned by broad dollar weakness and Beijing's efforts to attract capital inflows.
The renminbi posted its biggest quarterly gain in a decade during the January-March period, which was also its fifth consecutive quarterly gain, the longest winning streak since 2013.
The dollar was largely steady against its major trading partners, as traders were cautious amid lingering concerns over trade tensions between the United States and China.
China has slapped extra tariffs of up to 25 percent on 128 US products including frozen pork, as well as on wine and certain fruits and nuts, in response to US duties on imports of aluminium and steel, China's finance ministry said.
"The movement of the yuan may reflect market's view about China's position in the looming trade tension," Tommy Xie, economist at OCBC Bank in Singapore said in a note.
Xie pointed out that the yuan's sharp rally early last week was a result of the market's expectations that Beijing may compromise in trade talks.
Prior to market opening on Monday, the People's Bank of China lifted its official yuan midpoint to 6.2764 per dollar, 117 pips firmer than Friday's fix of 6.2881 and was the strongest since Aug. 11, 2015, when China shocked global markets with a sharp 2 percent one-off currency devaluation.
Monday's official guidance rate matched market forecasts.
In the spot market, the onshore yuan opened at 6.2675 per dollar and was changing hands at 6.2797 at midday, 52 pips weaker than the previous late session close and 0.05 percent softer than the midpoint.
Traders said corporate flow was the key factor influencing yuan trade on Monday. The firmer midpoint prompted buying interest in the greenback that dragged the spot rate lower.
Some market participants were reluctant to hold large positions ahead of the three-day Qingming tomb-sweeping festival, which starts on April 5.
The Chinese currency rose 0.8 percent versus the greenback in March, but edged up 0.3 percent on a trade-weighted basis against a basket of its trading partners' currencies, according to official data from the China Foreign Exchange Trade System (CFETS).
The index, published on a weekly and monthly basis, stood at 96.73 as of March 30, the CFETS said in a statement on Monday.
The Thomson Reuters/HKEX Global CNH index, which tracks the offshore yuan against a basket of currencies on a daily basis, stood at 97.86, weaker than the previous day's 97.9.
The global dollar index fell to 89.988 from the previous close of 90.151.
The offshore yuan was trading 0.13 percent firmer than the onshore spot at 6.2717 per dollar.
Offshore one-year non-deliverable forwards contracts (NDFs), considered the best available proxy for forward-looking market expectations of the yuan's value, traded at 6.3795, 1.62 percent weaker than the midpoint.
One-year NDFs are settled against the midpoint, not the spot rate.