Chinese residents more than tripled their foreign exchange purchases after the government sharply increased the forex quota for individuals in a bid to reduce swelling reserves, a senior government official said yesterday.

Demand by individuals to convert yuan into foreign currency soared 259 percent year-on-year in the four months through June, Deng Xianhong, deputy head of the State Administration of Foreign Exchange, said in an online interview. Deng did not provide specific figures, however.

"We've been receiving positive feedback since we eased foreign exchange rules for residents in February," said Deng.

The forex regulator raised the annual quota on foreign exchange transactions by private citizens to US$50,000 from the previous US$20,000 starting in February.

Individuals are now also allowed to buy more than the quota if they can show a special need, such as an extended educational trip abroad.

In addition to overseas trips, residents can use foreign exchange to invest in US dollar-backed B shares, foreign-currency products introduced by commercial banks, products from qualified domestic institutional investors and gold, according to Deng.

Lenders including the Bank of Communications and Industrial and Commercial Bank of China have offered investment products to cash in on Hong Kong's capital market. BoCom collected about one billion yuan from QDII products introduced in early June.

The US dollar-backed B shares climbed 141 percent so far this year after more than doubling in 2006.

Deng said the government is studying a series of reforms in personal direct investment and securities investment overseas but those moves depend on effective supervision. China's foreign-exchange reserves mounted to US$1.2 trillion in the first quarter this year, remaining the world's largest.