(Bloomberg) -- Some of China’s regional authorities are guiding firms to slow purchases of foreign currencies in a sign the nation is taking further measures to discourage capital outflows amid yuan weakness.

Regional regulators have been verbally guiding a number of companies in coastal provinces to delay or cut bulk buying of foreign exchange, especially the US dollar, people familiar with the matter said, asking not to be identified discussing private matters. 

Companies diluted FX purchases in recent weeks after the regulatory requests, which have been issued since at least last month and kept off written records, they said.  

Some firms were allocated a smaller quota for FX purchases than planned, or they were allowed to buy over a longer period of time, one of the people said. Others listed offshore have been encouraged to wire funds for dividends in yuan, another person said, adding such a move isn’t mandatory.

It’s unclear how extensively the guidance was applied, or the extent to which transactions or deals would have been affected. 

Firms with foreign investments can ask banks to manage the remittance of profits or dividend payments and those requests will undergo the normal compliance and authenticity checks, the State Administration of Foreign Exchange said in a written response to Bloomberg News.

Policies regarding companies’ foreign-exchange purchases have been consistent and ensure legitimate demand can be met, SAFE added.

Dividend payment bills by Chinese firms to their overseas investors are also expected to weigh on the yuan in coming months, as they typically involve converting yuan into Hong Kong dollars or other foreign currencies.

The guidance came as official data showed China’s capital exodus reached the worst level since 2016 last month, threatening to exacerbate depreciation pressure on the yuan. The currency has underperformed most Asian peers this month as China’s flagging economic growth fails to boost yuan assets or deter residents and corporates from hoarding a higher-yielding greenback.

The onshore yuan fell to the weakest level since November versus the dollar this week, after upbeat US consumer confidence data bolstered the greenback and added to the case for the Federal Reserve to hold rates higher for longer.

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