China's outstanding yuan funds for forex drops in May

BEIJING -- China's outstanding yuan funds for foreign exchange declined from a month earlier at the end of May, data from the country's central bank showed Tuesday.

The funds came in at about 21.32 trillion yuan ($3.16 trillion) at the end of last month, down by 8.99 billion yuan from April, according to the People's Bank of China.

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

China's foreign exchange reserves rose to $3.1278 trillion at the end of May, up $8.1 billion, or 0.26 percent from the end of April, data from the State Administration of Foreign Exchange showed.