(Yicai) Sept. 8 -- The People's Bank of China, the country's central bank, has increased its gold reserved for the 10th consecutive month in August, according to the latest data.

The gold reserves of the PBOC totaled 69.6 million ounces at the end of last month, up 930,000 oz from July, the State Administration of Foreign Exchange said yesterday. The reserves have increased by 6.9 million oz since last November.

In recent years, some central banks have increased their holdings of gold, mainly to optimize the structure of official reserve assets, promote their diversification, and enhance the country's ability to resist global financial market fluctuations and asset stability, said Zhou Maohua, a financial researcher at China Everbright Bank.

With the decline in US dollar credit and the sharp volatility of the global financial market, the diversification of foreign exchange reserves may continue, Zhou noted.

As global gold demand is rising, central banks continued to increase their forex reserves by buying the yellow metal in July, according to the latest data from the International Monetary Fund.

The SAFE also released the latest forex reserves data yesterday. As of Aug. 31, China's forex reserves totaled USD3.16 trillion, down USD44.2 billion or 1.4 percent from a month earlier.

China's forex reserves fell in August because the US dollar index rose, affected by macroeconomic data of major economies, monetary policy expectations, and other factors, and global financial asset prices fell, the SAFE noted.

In August, the US dollar index rose 1.7 percent to 103.6, as non-US dollar currencies depreciated, said Wen Bin, chief economist at China Minsheng Bank. In terms of assets, the US dollar-denominated Barclays Global Aggregate Total Return Index USD Hedged fell 0.1 percent, and the S&P 500 index dropped 1.8 percent.

The Chinese yuan depreciated in August. On Sept. 1, the PBOC decided to lower the forex deposit reserve ratio by 2 percentage points to 4 percent from Sept. 15. After the announcement, the offshore yuan rose significantly against the dollar, up more than 290 points at one point.

However, the Chinese yuan has been falling again since Sept. 4. Yesterday, the yuan's exchange rate against the US dollar once traded at 7.3294, the weakest since October last year, and closed at 7.3279, down 195 points from the previous session. The offshore yuan against the US dollar traded as low as 7.3372 yesterday.

Looking ahead, the SAFE believes that the Chinese economy will maintain a good momentum, which is conducive to the scale of foreign exchange reserves remaining basically stable.

Editor: Futura Costaglione