BEIJING -- China's outstanding yuan funds for foreign exchange declined in June, central bank data showed on Tuesday.

The funds stood at 21.17 trillion yuan (about $3.02 trillion) at the end of June, down by 6.02 billion yuan from the previous month, 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.

China's foreign exchange reserves expanded to $3.11 trillion at the end of June, up 0.3 percent from the end of May, according to the State Administration of Foreign Exchange.