The funds stood at nearly 21.3 trillion yuan ($3.34 trillion) at the end of last month, increasing by 6.19 billion yuan from the previous month, said 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.

The country's forex holdings stood at more than $3.21 trillion at the end of February, down $7.8 billion, or 0.24 percent, from the end of January, said the State Administration of Foreign Exchange.