BEIJING ? China's central bank set a stronger yuan exchange rate on Tuesday, after it had promised to let the currency trade more freely against the dollar.

The People's Bank of China set the central parity rate -- the centre point of the currency's official trading band -- at 6.7980 to the dollar, 0.43 percent stronger than Monday's 6.8275.

The central bank pledged at the weekend to make the yuan more flexible but ruled out any sharp fluctuations in the currency or a one-off adjustment.

The move was widely seen as a bid to head off rancor at this weekend's Group of 20 summit in Canada amid mounting accusations abroad that China's forex controls give its exporters an unfair competitive advantage.

In trading in China on Monday, the yuan broke through the 6.8 barrier to hit 6.7969 to the dollar, an appreciation of 0.40 percent before closing slightly off the peak, according to Dow Jones Newswires.

It was its strongest level since policymakers unpegged the yuan from the dollar in mid-2005 and moved to a managed floating exchange rate.

But Monday's trading level was still within Beijing's tight trading band and analysts said China's pledge did not presage a major revaluation.