China tightens control to restrain currency’s rise

By JOE McDONALD
AP Business Writer

BEIJING (AP) — China’s central bank is trying to restrain the rise of the yuan after the currency hit a 2 1/2-year high against the dollar. Commercial banks have been ordered to increase the amount of their foreign currency deposits that are held as reserves for the second time this year. That reduces the amount available for trading, making it easier for Beijing to manage the exchange rate. The People’s Bank of China is trying to make the yuan’s state-set exchange rate more flexible and market-oriented but has intervened over the past year to restrain its rise. Washington complains that a weak yuan makes China’s exports improperly cheap and swells its multibillion-dollar trade surplus.