A freer-floating yuan could be a positive for China’s sovereign credit rating, agency Fitch said, by helping preserve its foreign exchange reserves and cushioning some of the negative effects of U.S. trade tariffs.

Andrew Fennell, a director in Fitch's sovereign ratings arm, said Monday's fall in the yuan past the seven-per-dollar level was "not meaningful from a sovereign credit perspective."

"In fact, to the extent that moves are orderly and do not destabilize currency expectations or precipitate capital outflows, greater currency flexibility could even be viewed as positive from a credit perspective."

The Chinese authorities have been seeking to introduce greater currency flexibility for some time, he added, while the Chinese currency has tended to weaken during periods of trade war escalation and strengthen during cooling-off periods.

Fitch rates China at A+ with a 'stable' outlook, in line with both S&P Global and Moody's.