The yuan may be more likely to depreciate than appreciate in the next two years amid China's economic growth and financial reforms, Shen Minggao, head of China research at Citibank, said at a news conference in Shanghai on Tuesday.

Recent capital flows into China and arbitrage transactions have contributed to accelerated yuan appreciation, Shen said.

But the situation would not last long, as China is taking measures to reform its financial market, and economic growth may slow further in the next two years, he said.

Slower economic growth amid effective financial reforms may benefit China in the long run, according to Shen, who estimates that the country’s GDP growth in 2014 will be 7.3 percent.

Financial reforms, the high cost of funds and uncertainty over export growth may contribute to a further slowing of economic growth in the nation next year, Shen said.

The current one-year corporate bond yield has climbed to about 6 percent due to excessive distribution of funds to realty development projects and local governments, pushing up the cost of funds for other market players.

The seven-day Shibor, or Shanghai Interbank Offered Rate, rose to 8.84 percent on Monday before falling to 6.19 percent on Tuesday after the central bank injected money, the largest one-day drop since 2011.