China's policy makers are pushing back against a surge in theyuan by lifting rules that made betting against the currencyexpensive.

Effective Monday, financial institutions will no longer need toset aside cash when buying foreign exchange for clients throughcurrency forwards, the official Financial News reported, citing aPeople's Bank of China notice. Previously, banks had to hold 20% ofsales at zero interest for a year, a rule imposed in October 2015as the authorities struggled to contain the fallout from the yuan'sdevaluation. The central bank has also removed a reserverequirement on yuan deposited onshore by overseas financialinstitutions, the newspaper reported.

The news drove the currency lower, with the yuan falling 0.54%to 6.5240 per dollar as of 6:09 p.m. in Shanghai, and down 0.5% inHong Kong. The PBOC emailed a statement that cited the head of itsfinancial research institute as confirming the easing of the rules,although it didn't specify the timing.