(Yicai Global) June 8 -- China’s foreign exchange reserves edged up last month, after falling over the previous four months, according to the latest official data.

China’s forex holdings stood at USD3.13 trillion at the end of May, up USD8.1 billion from April and above USD3.1 trillion for the 25th consecutive month, data released by the State Administration of Foreign Exchange showed yesterday.

“The operation of China’s forex market was generally stable” in the month, SAFE spokesperson Wang Chunying said at a news conference yesterday, “with onshore supply and demand for foreign exchange basically in balance.”

Gains by most major non-US dollar currencies was the main factor behind the increase in China’s foreign exchange holdings, said Zhao Qingming, deputy dean of China Foreign Exchange Investment Research Institute, according to a report by Shanghai Securities News today.

The US dollar index fell 1.2 percent to 101.8 last month, mainly because of the impact of monetary policies in major countries and corresponding expectations, the prospects for global economic growth, and the geopolitical situation. The euro, UK pound, and Japanese yen rose 1.8 percent, 0.2 percent, and 0.8 percent, respectively.

Shanghai Securties News also reported Guan Tao, global chief economist at Bank of China International China, as saying that the Chinese yuan continued to fluctuate widely in May, with the central parity rate down 0.6 percent from a month earlier and the average rate plunging as much as 4.2 percent.

Forex reserves remained stable in the period, indicating a basic balance between cross-border capital flows and domestic supply and demand for foreign exchange, Guan added.

Fluctuations are still within a normal range, although they can vary from several billions to tens of billions of yuan every month, Zhao said, adding that China’s forex reserves will remain stable between USD3 trillion and USD3.2 trillion.

Editor: Futura Costaglione