(Bloomberg) — The yuan ended its longest winning streak since 2010 as China moved to rein in the currency’s rise by scrapping an extra fee for betting against it in the derivatives market.

China’s yuan slipped on Friday after rising in the last 10 sessions, its longest run of gains since September 2010. That’s after the People’s Bank of China said in a statement it will remove the reserve requirement of 20% on foreign-currency forward contracts from March 2.

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The change lowers the cost for market participants to bet against the yuan via derivative contracts with banks. The move will “support companies’ management of foreign-exchange risks,” the PBOC said in the statement.

The shift aims to check the yuan’s strength after it reached multi-year highs against a softening dollar. Officials have repeatedly warned against overshooting of the exchange rate as it would pressure local exporters and worsen deflation.

“This is one of the tools expected to be utilized to slow the appreciation of the yuan against the dollar,” said Fiona Lim, strategist at Maybank in Singapore. “The PBOC is sending a clear messaging with its recent fix that although the central bank does not oppose yuan gains, the pace should be curbed.”

The onshore yuan edged down 0.1% to around 6.86 per dollar on Friday morning in Shanghai after rallying to the strongest level since April 2023 in the last session. Robust foreign-exchange conversion, an improving US-China relationship, and broad weakness in the greenback have supported yuan appreciation.

Some state banks briefly purchased dollars in early trading and a few proprietary desks pared short dollar positions, according to traders. However, exporters’ settlement flows kept the market broadly balanced, said the traders who asked not to be named as they are not allowed to speak publicly.

These market maneuvers unfolded against the backdrop of broader policy signals.

The PBOC has been setting a string of weaker-than-expected daily reference rates for the currency to resist a sharp appreciation. The so-called fixing limits the yuan’s move by 2% on either side.

On Friday, the central bank set the daily reference rate for the currency 793 pips weaker than the average forecast in a Bloomberg survey. That marked a record deviation on the weaker side, signaling the PBOC’s preference to slow the currency’s gains.