China will remove restrictions on how much foreign exchange domestic companies can buy to fund overseas acquisitions or expansion, a step toward a more freely traded currency.

Companies may use their own holdings, buy foreign exchange from regulators or borrow from overseas or domestic lenders to invest abroad starting July 1, the State Administration of Foreign Exchange said in a statement on its Web site on Thursday. The regulator’s move won’t change approval requirements set by other government bodies.

China is gradually loosening controls on the yuan after ending a decade-old peg to the dollar in July. Surging exports helped drive the nation’s foreign-exchange reserves up 33% to a record $875.1 billion in the year to the end of March.

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