"It's time to let the market more or less decide the rate while reducing the intervention," Yi said at an annual International Monetary Fund meeting.
China Daily reported Monday that Yi said the government is planning to act on allowing the renminbi more flexibility.
"This reform is aiming at increasing the flexibility of the renminbi exchange rate and making market forces play a more important role in determining the rate," he said.
Earlier this month, China said it would increase the currency's trading band against the U.S. dollar to 1 percent from 0.5 percent.
China has not given the renminbi that much flexibility since 2007.
Yi, however, was not specific about when or how China would ease back controls on the renminbi, the newspaper said.
Some economists have said the renminbi was undervalued by 20 percent to 40 percent, giving the price of Chinese goods that much of an advantage in international trades.
China's recent moves to counter public criticism of its exchange rate policies has been minor, some have said.
Yi said caution was required.
"In terms of stimulating domestic demand, it is definitely the right direction to go, and lots may be done to achieve the goal, but we must avoid economic bubbles and exchange rate overshooting," Yi said.