BEIJING -- China's outstanding yuan funds for foreign exchange expanded month-on-month at the end of January, according to central bank data released on Tuesday.

The funds stood at nearly 21.3 trillion yuan ($3.35 trillion) at the end of January, up 33.34 billion yuan from the previous month, the People's Bank of China data shows.

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 came in at $3.22 trillion at the end of January, down $28.5 billion, or 0.88 percent, from the end of 2021, data from the State Administration of Foreign Exchange shows.