(Yicai) Sept. 8 -- China’s foreign exchange reserves rose last month because of the combined effect of currency translation and asset price changes, according to the latest official data.

The country’s forex reserves inched up by USD19.5 billion or 0.6 percent to USD3.4383 trillion as of Aug. 31 from July 31, the State Administration of Foreign Exchange announced yesterday.

The US Dollar Index continued to decline in August, though the drop narrowed to 0.5 percent from 1.3 percent in July, said Guan Tao, global chief economist at Bank of China International. Non-US dollar currencies rose and fell unevenly. The euro and the British pound continued to appreciate against the US dollar but at a slower pace, while the Japanese yen flipped from gains to losses, depreciating 1.4 percent.

On the asset side, the US dollar-hedged Global Aggregate Bond Index rose 0.1 percent last month, and the S&P 500 Index climbed 2.6 percent, ending a two-month losing streak, Guan noted.

The slight rise in forex reserves in August was mainly because major stock indexes rebounded to some extent after the substantial global artificial intelligence industry valuation correction in July, said Wang Qing, chief macro analyst at Golden Credit Rating International.

Meanwhile, influenced by factors such as cooling expectations of Federal Reserve rate hikes, the US Dollar Index fell 0.4 percent last month, which also pushed up the valuation of non-US dollar assets in China’s foreign reserves, Wang explained.

China’s import growth remained above 25 percent for the fifth consecutive month in August, said Wen Bin, chief economist at China Minsheng Bank, adding that the coordinated growth of imports and exports will help keep China’s account balance within a reasonable and balanced range.

In terms of cross-border capital flows, multiple capital account liberalization measures were implemented in August, further strengthening the appeal of the Chinese market to foreign capital, according to Wen.

Editor: Futura Costaglione