(Yicai) Feb. 9 -- China increased its gold reserves for the 15th straight month in January, despite the volatility of the precious metal's international prices last month.

Gold reserves at China's central bank rose by 40,000 ounces to 74.19 million ounces in January from the previous month, the State Administration of Foreign Exchange announced on Feb. 7.

Increasing gold reserves will remain the People's Bank of China's general direction going forward, aiming to optimize the structure of international reserves, advance the internationalization of the Chinese yuan in a prudent and solid manner, and respond to changes in the international environment, said Pang Ming, senior researcher at the National Institution for Finance and Development.

The fact that the PBOC increased its gold reserves for 15 consecutive months reflects a clear orientation to raise the proportion of non-credit assets in the foreign exchange reserve structure, as well as the authorities' greater emphasis on the security and long-term stability of reserve assets against the backdrop of accelerated adjustments in the global monetary system, Pang noted.

China's forex reserves rose by 1.2 percent or USD41.2 billion to USD3.3991 trillion as of Jan. 31 from Dec. 31, hitting a new 10-year high, SAFE data also showed.

Last month's increase reflects the combined effect of exchange-rate translation -- the revaluation of foreign-currency assets when expressed in US dollar -- and global asset price changes, along with the monetary and fiscal policies and economic data of major economies, as the US Dollar Index -- a measure of the greenback's value relative to a basket of other currencies -- declined and prices of major global financial assets increased, the SAFE said.

The increase in China’s forex reserves is partly because of the valuation gains from the strengthening of major non-US dollar currencies against the US dollar and the mixed performance of major financial assets, Pang pointed out. Moreover, China's cross-border payments and receipts remained balanced, corporate and residential demand for forex purchase stayed relatively moderate, and market expectations for the Chinese yuan exchange rate swung toward stability, he added.

With the continuous intensification of policies to facilitate cross-border investment and financing, the Chinese capital market's attractiveness to foreign capital will keep growing, said Wen Bin, chief economist at China Minsheng Bank. China's economic operations have maintained a momentum of progress, further demonstrating its development resilience, which provides a strong underpinning for the basic stability of the forex reserves scale, he noted.

Editor: Futura Costaglione