February 21 -- The balance of funds outstanding for foreign exchange in January hit 25.50 trillion yuan, indicating a net addition of 140.9 billion yuan in January and the first monthly increase after three months of declines during the fourth quarter of 2011, reports 163.com, citing The People’s Bank of China.

According to the central bank, the balance of funds outstanding for foreign exchange had fallen by 100.33 billion yuan in December, and the rate of decline accelerated.

Lian Ping, the chief economist of Bank of Communications (601328, 3328.HK), said the rise in the balance of funds outstanding for foreign exchange was related to the increasing trade surplus.

The slight appreciation in the yuan contributed to the increase in the balance of funds outstanding for foreign exchange as it strengthened market confidence, resulting in higher capital inflows, said Lian.

China had posted average monthly increases of 250 billion yuan in the balance of funds outstanding for foreign exchange in 2011.