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Monday, July 17, 2017, 20:49
China's yuan funds for foreign exchange drops in June
By Xinhua
Monday, July 17, 2017, 20:49 By Xinhua

In this Aug 11, 2015 photo, a worker counts Chinese currency Renminbi (RMB) at a bank in Linyi, east China's Shandong Province. (Zhang Chunlei / Xinhua)

BEIJING – China's central bank's yuan outstanding for foreign exchange continued to fall in June, representing the 20th straight month of decline.

The funds shrank by 34.32 billion yuan (around US$5.05 billion) from May to 21.5 trillion yuan, according to data from the People's Bank of China.

The decrease was more than a drop of 29.33 billion yuan registered 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 inbound foreign investment, adding funds to the money market.

Such funds are an important indicator of cross-border foreign capital flows and domestic yuan liquidity. A decrease of the funds often signals higher capital flight pressure.

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