UPDATE 1-China eases cross-border yuan policy to help trade and investors

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BEIJING, Sept 18 (Reuters) - China will make it easier for firms to make cross-border yuan settlements on foreign trade, and relax some curbs on foreign investment, the central bank said on Friday, as part of steps to support economic recovery.

Fears in China of a deepening financial war with the United States have fuelled calls to bolster the yuan’s global clout as Beijing looks to decrease reliance on the dollar.

China will give banks more leeway in handling cross-border yuan settlements in foreign trade for qualified firms, according to draft guidelines issued by the People’s Bank of China.

China will relax restrictions on use of yuan income under some capital account categories, including repatriated funds raised from overseas stock listings, and remove curbs on the reinvestment of yuan funds by some foreign-funded firms, the guidelines said.

China will also support banks to provide yuan payment services for e-commerce companies, and individuals will be supported in conducting cross-border yuan business. (Reporting by Lusha Zhang and Kevin Yao; Editing by Kevin Liffey)