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China's yuan funds for foreign exchange rises for 3rd straight month in November
Last Updated: 2017-12-15 14:12 | Xinhua
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The central bank's yuan funds outstanding for foreign exchange increased for the third month in a row in November, a sign of eased capital flight pressure.

The funds grew by 2.37 billion yuan (359 million U.S. dollars) in November, compared with an increase of 2.1 billion yuan in October, according to the data from the People's Bank of China Thursday.

As the Chinese currency is not freely convertible under the capital account, the central bank has to purchase foreign currency generated by China's 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. An increase in the funds usually signals eased capital flight pressure, while a decrease often means higher capital flight pressure.

Analysts partly attributed the increase in November to a stronger yuan that discouraged capital outflow. The value of the Chinese currency rallied due to a weaker U.S. dollar and the firming-up of the Chinese economy.

Capital flight was seen as a major risk for China early this year. A faltering U.S. dollar and a stronger Chinese economy helped the yuan stage a turnaround, bolstering confidence in the economy.

Measured by the central parity rate, the yuan has appreciated more than 4 percent against the dollar this year.

The rise of the funds was in line with the upward trend of foreign exchange reserves, which rose for the 10th month in a row to over 3.1 trillion U.S. dollars at the end of November, according to the central bank.

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