Photo:Xinhua

China's foreign exchange reserves increased for the second straight month to reach $3.1 trillion by the end of May, up 0.3 percent month-on-month, mainly due to the weakened US dollar index and a rise in the country's main asset price.

The country's gold reserves stood at 62.64 million ounces, remaining flat for a consecutive eight months.

Wang Chunying, a spokesperson for the State Administration of Foreign Exchange, said the double effect of a weak US dollar index and main asset price rise leads to a slight rise in the country's foreign exchange reserves in May.

She said that the country's foreign exchange reserve scale will continue to maintain overall stability thanks to the country's economic growth potential, strong resilience and sufficient policy tools.

A large foreign exchange reserve is expected to support the internalization of the Chinese yuan. In the latest move of the yuan's internationalization, the cross-border Chinese yuan settlement is being expanded from the pilot free trade zone Qianhai and Shekou area to the all of Shenzhen city, South China's Guangdong Province, to increase convenience for trade and investment, the Xinhua News Agency reported on Friday.

Under the mechanism, banks in the city will be allowed to conduct cross-border settlement in yuan for quality enterprises, without filing for approvals in advance, it said.

Guan Tao, chief global economist of BOC International (China) Co, said that China's early economic recovery - along with the country's continuous opening-up amid the US' anti-globalization move - will help attract foreign investors to invest in renminbi-denominated Chinese assets.