CHINA’S central bank has relaxed some of the curbs on cross-border capital outflows it put in place just months ago to shore up the yuan currency, banking sources said yesterday.

    The first easing of the measures comes as China’s leaders and financial markets feel more confident that pressure on the yuan and the country’s foreign exchange reserves has diminished, thanks largely to a pullback in the surging U.S. dollar.

    The yuan slumped around 6.5 percent against the dollar last year, but has firmed nearly 1 percent in 2017, defying — for now — many analysts’ expectations of further depreciation.

    Indeed, a Reuters poll earlier this month indicated investors likely increased their bullish bets on the yuan to the most since July 2015.

    With less incentive for capital flight and the economy on steadier footing, China’s foreign exchange reserves have clawed back above the closely watched US$3 trillion level.

    Premier Li Keqiang said Tuesday that market confidence in the yuan has significantly improved, Xinhua reported.

    As of last week, the People’s Bank of China (PBOC) is no longer demanding that banks match outflows with equal inflows, the sources said.

    The South China Morning Post first reported the relaxation of the capital controls earlier yesterday.

    There was no immediate comment from the People’s Bank of China when contacted by Reuters. The State Administration of Foreign Exchange (SAFE) did not have an immediate response to Reuters’ questions on the South China Morning Post report.(SD-Agencies)