(Yicai Global) July 8 -- China's foreign exchange reserves tallied USD31.2 trillion as of the end of June, their highest since February 2018.

The figure was USD18.2 billion higher than in May, the State Administration of Foreign Exchange said on July 7. Gold reserves increased for the seventh straight month, rising 330,000 ounces to 61.94 million ounces, worth USD87.3 billion.

Global trade and monetary policies at major central banks pushed down the dollar index and led to higher asset prices in international financial markets, Wang Chunying, spokesperson and chief economist at the SAFE, said on the reason behind the rise. China will continue to open up to make economic growth more sustainable, he added, saying this will build the foundations for a stable foreign exchange market and therefore stable foreign exchange holdings.

Beijing and Washington agreed last month to restart trade talks and the yuan has been rising against the dollar since. The onshore yuan became 0.5 percent stronger against the dollar in June, rising in power for the first month since March.

The dollar index fell 1.6 percent over the same period, while the yield on 10-year US Treasury bonds slid 2 percent amid expectations that the Federal Reserve would cut interest rates. London's spot gold price surged 8 percent to USD1,400 an ounce throughout the month.

The Chinese mainland also enjoyed a net inflow of funds into its securities market, with CNY42.6 billion (USD6.2 billion) shifting north from Hong Kong to mark two straight months with a northbound net flow and a new high since February. And the value of Chinese bonds held by overseas institutions tallied CNY1.6 trillion (USD239 billion), up CNY34.6 billion from May and rising for the seventh straight month, according to data from China Government Securities Depository Trust & Clearing.

Editor: James Boynton