'FX forwards measure is not capital control'

China's central bank defended on Tuesday new regulations imposed on the currency forwards market this month, saying they were not a form of capital control and were introduced after investors had speculated in the market.

The controls would help to stabilize China's financial system at a time when increased yuan volatility is likely to cause more companies to incur foreign exchange losses, the People's Bank of China said in a statement on its website.

The central bank also said its intervention in the foreign exchange market was one of the reasons for a fall in foreign exchange reserves and any future fluctuations in reserves would be "normal".