China eases rules on multinationals' foreign debt management

The rules, which take effect immediately on a trial basis, permit these companies to use the local currency yuan liquidity derived from their sales of foreign currency debt to pay back yuan loans and conduct equity investment, the State Administration of Foreign Exchange said in a statement on its website.

The rules come after Reuters reported that the central bank was tightening regulations on trade in yuan derivatives, in efforts to curb speculation and volatility after a shock devaluation of the yuan last month.

Analysts see the moves as relieving downward pressure on the yuan by encouraging companies to sell off their foreign currency.

(This story has been corrected to change day to Wednesday from Friday in first paragraph)

(Reporting by Lu Jianxin and Pete Sweeney; Editing by Jacqueline Wong)