CHINA’S foreign exchange reserves unexpectedly bounced back in May after a surprise drop the previous month.

The country’s foreign exchange reserves rose US$6 billion in May to US$3.101 trillion, central bank data showed yesterday.

Economists polled previously had expected reserves to drop US$5 billion to US$3.090 trillion.

The unexpected rise in May was due to valuation effects and changes in asset prices, the foreign exchange regulator said in a statement accompanying the data.

Sound fundamentals in the Chinese economy will underpin operations in the foreign exchange market and provide a solid basis for the stability of forex reserves, the State Administration of Foreign Exchange said.

Weak economic data for April suggested China’s economy was still struggling for traction, underlining the need for more stimulus on top of a host of growth boosting measures rolled out since last year.

The yuan fell 2.5 percent against the U.S. dollar in May, its biggest monthly loss since mid-2018.

The value of China’s gold reserves also rose to US$79.83 billion from US$78.35 billion at the end of April, rising to 61.61 million fine troy ounces from 61.1 million ounces in April.

(SD-Agencies)