China’s foreign exchange reserves rose less than expected in August amid persistent weakness in the US dollar and solid gains in the yuan as China’s economy recovers steadily.

The country’s foreign exchange reserves – the world’s largest – rose US$10.2 billion in August from July to US$3.165 trillion, central bank data showed on Monday.

Economists polled by Reuters had expected the country’s reserves would climb by US$21.61 billion.

Foreign inflows into Chinese stocks and bonds also have been steadily rising as investors bet on an economic rebound.

Yuan - US dollar exchange rate

Price trends over time for how the Chinese currency trades against the US dollar

Strict capital controls largely helped China keep outflows under control over the past few years despite weakening economic growth, a prolonged trade war with the United States and the shock from the coronavirus outbreak.

The yuan rose about 1.8 per cent against the US dollar in August and has extended gains into September, while the US dollar fell about 1.3 per cent in August against a basket of other major currencies.

China held 62.64 million fine troy ounces of gold at the end of August, unchanged from the end-July.

The value of its gold reserves fell to US$122.62 billion at the end of August from US$123.09 billion at the end-July.