SHANGHAI (Reuters) – China stepped up policy measures on Monday to defend the weakening yuan by relaxing rules to allow more offshore borrowing and sending verbal warnings as the Chinese currency flies around at a 16-month low against the strong dollar.

The yuan has faced recent depreciation pressures, weighed down by a triple-whammy of a broadly stronger greenback, falling yields in China and rising trade tensions with other economies.

The People’s Bank of China (PBOC) announced on Monday that borrowing limits will be raised to allow corporations to borrow more from abroad.

The ratio under its macro-prudential assessments (MPA) – determining the maximum that a company can borrow in relation to its net assets – will be raised to 1.75 from 1.5, with immediate effect.

The move is to “further develop the macro-prudential management of cross-border financing, continue to increase the sources of cross-border funds for businesses and financial institutions, and guide them to optimize their asset-liability,” the PBOC said in a statement jointly issued by the foreign exchange regulator.

Separately, the China Foreign Exchange Committee plans to be determined to keep the yuan exchange rate basically stable at a reasonable and balanced level, the central bank said in another statement.

The committee is a forum under the sponsorship of the central bank and the foreign exchange regulator.

The committee also said that monetary authorities can increase the stability of the FX market and strengthen market supervision. They will also correct pro-cyclical market activities, deal with behaviors that disrupt market orders and prevent the risks of overshooting the exchange rate.

And in Hong Kong, PBOC Governor Pan Gongsheng told the Asia Financial Forum on the same day that “China has the confidence, conditions and ability to continue the stable operation of the foreign exchange market.”

China will keep the yuan exchange rate basically stable at a reasonable and balanced level,” Pan reiterated.

These moves “send a signal to strengthen the yuan,” said Ken Cheung, chief Asian FX strategist at Mizuho (NYSE:) Bank.

“But the actual impact on capital flows and exchange rates is relatively limited, due to the low cost of domestic financing.”

Cheung said regulators will continue to use daily midpoint fixing to stabilize the currency and guide market expectations.

China traded at 7.3315 per dollar at 0247 GMT on Monday, not far from a 16-month low of 7.3328 hit on Friday. It has lost more than 3% against the dollar since US President-elect Donald Trump won the election in November.

The central bank set its official midpoint guidance on the stronger side at the key level of 7.2 and stronger than market projections since mid-November. Traders and analysts have widely interpreted this as a sign of rising nervousness over the yuan’s recent devaluation.

The PBOC said last week it would sell 60 billion yuan worth of six-month yuan bills in Hong Kong on Jan. 15, the most since the central bank started such a bill sale in the center of finance in 2018.

Selling these yuan bills mops up market liquidity to reduce speculative bets against the yuan.