China's yuan position for purchasing foreign exchange showed its first monthly decline in April this year, sparking concerns over increasing capital outflows and the negative effect on monetary policies.

The yuan holdings, an indicator of capital inflows or outflows, stood at 25.6 trillion yuan ($4.04 trillion) last month, down by 60.6 billion yuan compared with a month earlier, according to data released by the People's Bank of China (PBOC), the central bank, on Tuesday.

In the fourth quarter of 2011, holdings declined for three consecutive months, indicating that capital withdrew from the world's second-largest economy amid rising global uncertainties and lower forecast growth for China.

Although holdings started growing again in early 2012, worries of further capital outflows persist as China's foreign-exchange reserves saw the first monthly decline since last December in March, falling by $4.69 billion from February.

Zhou Xiaochuan, the central bank governor, said earlier that PBOC moves, such as adjustments in the reserve requirement ratio for commercial lenders, are closely related to the yuan position for purchasing foreign reserves.

On May 12, the PBOC announced a cut in the reserve required ratio by 50 basis points for the second time this year, to inject about 400 billion yuan into the market, viewed as a signal of more easing to come.

wangxiaotian@chinadaily.com.cn