The central bank's yuan funds outstanding for foreign exchange posted a record plunge at the end of December from the end of November, it said on Friday.
The People's Bank of China said its yuan funds outstanding for foreign exchange totaled 24.85 trillion yuan (3.79 trillion U.S. dollars) at the end of December, down 708.2 billion yuan from the end of November. Such funds only rose in January and October in 2015.
The funds are an important indicator of foreign-capital flow in and out of China. As the United States raised interest rates in December, cross-border investment flow has been affected in emerging markets, said Yan Ling, an analyst with the China Merchants Securities.
Funds outstanding for foreign exchange refer to the volume of a local currency that a central bank spends on buying incoming foreign currencies so that the currencies can circulate locally. For example, in China, foreign currencies must be converted into yuan before they can be used.
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