China's yuan funds outstanding for foreign exchange continued to decline in December, according to central bank data.

The funds stood at 21.256 trillion yuan (about 3.14 trillion U.S. dollars) at the end of last month, down from 21.26 trillion yuan in November, 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.

A similar measure of capital flow, the foreign exchange reserves edged up to 3.0727 trillion U.S. dollars at the end of December, up from 3.0617 trillion dollars in November.