SHANGHAI—Multinational companies are suddenly finding themselves in the crosshairs as China dials back its effort to turn the yuan into a global currency, alarmed that it has accelerated the flight of capital from its shores.

In recent days, according to bankers and officials familiar with the situation, China’s foreign-exchange regulator has instructed banks to sharply limit how much companies move out of the country and into their other operations around the world. Until this week, it was possible for big companies to “sweep” $50 million worth of yuan or dollars in or out of China with minimal documentation. Now, these people say, the cap is the equivalent of $5 million, a pittance for the largest corporations.

Beijing is fighting an increasingly vicious cycle of capital outflows that weaken the yuan. Most dramatically, the State Council, China’s cabinet, intends to tighten scrutiny of overseas acquisitions by domestic companies, The Wall Street Journal reported last week, which could result in deal delays or outright cancellations. Until now, few of China’s capital-control measures took obvious aim at foreign businesses.

The recent moves effectively erode the yuan’s appeal as a rival to the dollar just two months after the International Monetary Fund added it among its reserve currencies on Oct. 1—an acknowledgment the IMF trusted China to further loosen its grip on the yuan.

Later that month, top financial officers from one of the largest U.S. pharmaceutical makers paid a visit to the Chinese agency that decides how much of its hundreds of millions of dollars deposited in the country can be taken out.