China's foreign exchanges reserve rose to $3.12 trillion in June, a rise of $18.23 billion from May, the highest since April last year, data from the central bank revealed on Monday.

Meanwhile, gold holdings have also increased to 61.94 million ounces with a value of $87.28 billion as of the end of June, up 330,000 ounces from the previous month, central bank data showed. This represents increases for seven straight months.

Affected by factors such as the global trade situation and the monetary policy of major central banks around the world, the US dollar index fell and asset prices in international financial markets rose. Factors such as exchange rate conversion and asset price changes have combined to increase the country's foreign exchange reserves, Wang Chunying, spokesman and chief economist of the State Administration of Foreign Exchange, China's foreign exchange regulator, said on Monday.

Dong Dengxin, director of the Financial Securities Institute at the Wuhan University of Science and Technology, told the Global Times on Monday that the increases in foreign exchange reserves and gold holdings also come amid a long-lasting trade war has driven China to expand its investment and foreign reserve varieties beyond the US Treasury to avoid risks.

China's holdings of US Treasury bonds and notes for April fell to their lowest level since May 2017, data from the Department of the United States Treasury showed in June. While China still remains the largest non-US holder of treasuries in the world.

"Despite trade tension between the two has been eased for the moment, China will continue to slash dollar assets and find other alternatives to invest. Given that, Japanese and European treasuries, along with gold are also good choices," Dong said.

Dong estimated that China will continue to increase its gold holdings in the future. 

Looking forward, the international economic and financial situation is still complicated, but China will continue to promote high-quality economic development and actively implement all-round opening-up measures. These will provide strong support for the stability of China's foreign exchange market, Wang said.

Global Times