China's yuan funds outstanding for foreign exchange grew each month during the first half of this year, official data showed today. The funds stood at 21.52 trillion yuan (US$3.2 trillion) at the end of June, up by 7.61 billion yuan from a month earlier, according to the People's Bank of China, Xinhua reports. June's increase followed a rise of 9.1 billion yuan in May. As the Chinese currency is not freely convertible under the capital account, the central bank has to purchase foreign currency generated by China's 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. An increase in the funds usually signals eased capital flight pressure, while a decrease often means higher capital flight pressure. China's foreign exchange reserves remained relatively stable at US$3.1121 trillion at the end of June, up 0.05 percent from May, earlier data showed. "China has ample foreign exchange reserves and relatively large room for policy controls. China is capable and confident in coping with all sorts of challenges," said Wang Chunying, spokesperson for the State Administration of Foreign Exchange, at a press conference today.
China 's yuan funds outstanding for foreign exchange soared to CNY21.52tn ( $ 3.2tn ) for H1 billion , followed by CNY9.1bn ( $ 1.34bn ) from April to 2008 and by inflation ( $ 1.1bn ) from May to June , according to China 's central bank . These funds are a significant indicator of cross - border foreign capital flow and domestic yuan liquidity , and so any investment generally has eased capital market pressure .