BEIJING - China's outstanding yuan funds for foreign exchange expanded month on month at the end of December 2021, the central bank data showed on Monday.

The funds stood at nearly 21.29 trillion yuan ($3.35 trillion) at the end of December, up 25.78 billion yuan from the previous month, according to the People's Bank of China.

The outstanding yuan funds increased by 155.91 billion yuan for the whole of 2021, the data showed.

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 forex holdings amounted to $3.2502 trillion at the end of December, up $27.78 billion, or 0.86 percent from a month earlier, according to data from the State Administration of Foreign Exchange.