China's yuan funds outstanding for forex decline in February

BEIJING - China's yuan funds outstanding for foreign exchange continued to decline in February, central bank data showed Wednesday.

The funds stood at 21.22 trillion yuan ($3.02 trillion) at the end of last month, down by 12.5 billion yuan from January, according to the People's Bank of China.

As the Chinese yuan is not freely convertible under the capital account, the central bank has to purchase foreign currency generated by a trade surplus and foreign investment in the country, adding funds to the money market. Such funds are an important indicator of cross-border foreign capital flows and domestic yuan liquidity.

A similar measure of capital flow, the foreign exchange reserves came in at $3.1067 trillion at the end of February, down by $1.2 billion, or 0.04 percent, from the beginning of 2020, official data showed.