(Yicai Global) June 10 -- China's foreign exchange reserves, the world's largest pool of assets held by a central bank, rose to USD3.1 trillion at the end of May, a new high in nine months.

China's foreign reserves increased by 6.1 billion in a month, the People's Bank of China said in a statement today. They decreased by USD3.8 billion over one month at the end of April. 

The escalation of global trade frictions and the uncertainty of Brexit boosted risk-aversion and both the US dollar index and the global bond index rose, which drove small increases in the scale of China's foreign exchange reserves, said Wang Chunying, spokesperson of the State Administration of Foreign Exchange.

Wang predicted that the global political environment and economy will face more uncertainties and volatility in the future. However, the fundamentals of the Chinese economy will provide a solid foundation for stable foreign exchange reserves, he added. 

The rate of US 10-year Treasuries fell to 2.1 percent from 2.5 percent in one month ended the first day of June, and the yields of national debt in Japan, the UK, and the eurozone have all declined, said Liu Jian, a senior researcher at a think tank under the Bank of Communications. A lower yield signals increasing demand and higher prices.

The Chinese yuan's exchange rate against the US dollar fell last month, which may have prompted certain capital outflow pressures, but the cross-border capital flows were still generally balanced, Liu said. Foreign institutions continued to increase their holdings of yuan-denominated bonds, which offset the outflow of funds to some extent, Liu added. 

Editor: Emmi Laine