(Yicai) Sept. 8 -- China’s foreign exchange reserves increased for a third straight month in August because of a weaker US dollar and gains in global financial assets, and the country extended its gold-buying run to a 22nd consecutive month, according to the latest official data.

China’s forex reserves rose 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 country also bought 650,000 troy ounces of gold in the month, taking its holdings to 76.73 million t oz.

The US Dollar Index -- a measure of the greenback's value relative to a basket of other currencies -- declined further in August, though the pullback 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 dollar but at a slower pace, while the Japanese yen flipped from gains to losses, depreciating 1.4 percent, Guan said.

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.

China’s forex reserves rose largely as a result of the rebound in major global stock indexes after valuations across the artificial intelligence sector corrected in July, said Wang Qing, chief macro analyst at Golden Credit Rating International.

Meanwhile, influenced by factors such as cooling expectations of interest rate hikes by the US Federal Reserve, 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.

The value of China’s gold reserves rose to USD350.1 billion last month, up from USD306.4 billion in July, mainly as a result of the rising price of the precious metal rather than new additions.

Imports grew by more than 25 percent for the fifth consecutive month, said Wen Bin, chief economist at China Minsheng Bank, adding that the coordinated growth of imports and exports should help keep China’s current account balance within a reasonable and balanced range.

In terms of cross-border capital flows, a number of measures to open up capital-account transactions were implemented in August, further strengthening the appeal of the Chinese market to foreign capital, according to Wen.

Editor: Futura Costaglione