The amount of money invested by overseas institutions and individuals in yuan-denominated assets declined in June, following two months of rises, new data from the People's Bank of China (PBOC) showed.
Foreign holdings in yuan-denominated assets last month dropped 10.24 billion yuan from May to 4.42 trillion yuan (722.55 billion U.S. dollars), a decline mainly seen in the stock market, with investors rushing to cash out in the recent market freefall.
Around 67.38 billion yuan of Chinese stocks were sold off by foreign investors in June, leaving total holdings at 613.36 billion yuan, nearly 10 percent less than in May, the data showed.
The Chinese stock market plunge, which has knocked 35 percent of the stocks value from a peak in mid-June, is the main factor that led to foreign investors' cashing out, said Xie Yaxuan, chief analyst with China Merchants Securities.
The market began to pick up Thursday, after the government stepped in with measures including pouring in funds and restricting futures trading on a major small-cap index.
In contrast to stocks, investment in yuan-denominated bonds, loans and deposits increased month on month by around 15.58 billion yuan, 32.33 billion yuan and 9.23 billion yuan, respectively, the PBOC data showed.
As the internationalization of the Renminbi gains momentum, more non-Chinese will invest in yuan-denominated assets in the future, Xie said.
China has taken many measures to push for the yuan's globalization, including currency swaps with more than 30 countries and regions, setting up yuan clearing banks in foreign cities and allowing direct trading between yuan and other major currencies in the inter-bank foreign exchange market.
