(Yicai) Feb. 9 -- China increased its gold reserves for the 15th straight month in January, despite volatility in international prices of the precious metal.

The central bank’s gold holdings rose by 40,000 ounces to 74.19 million ounces in January from the previous month, the State Administration of Foreign Exchange announced on Feb. 7.

The People's Bank of China is likely to go on buying gold, aiming to optimize the structure of its international reserves, advance the internationalization of the Chinese yuan in a prudent and solid manner, and respond to changes in the international environment, said Pang Ming, senior researcher at the National Institution for Finance and Development.

The PBOC’s 15-month gold-buying streak signals a clear tilt toward raising the share of non-credit assets in its foreign reserves, and reflects greater emphasis by the authorities on the safety and long-term stability of reserve assets amid an accelerating adjustment in the global monetary system, Pang noted.

China's foreign exchange reserves rose by 1.2 percent, or USD41.2 billion to USD3.3991 trillion, as of Jan. 31 from Dec. 31, hitting a new 10-year high, SAFE data also showed.

The SAFE attributed the rise to a weaker US Dollar Index -- a measure of the greenback’s value relative to a basket of other currencies -- and generally higher prices for major global financial assets resulting from fiscal and monetary policies and market expectations in major economies. The combined effect of exchange rate conversion and asset price changes resulted in the increase in foreign exchange reserves that month, it said.

The rebound in forex reserves was partly due to the appreciation of major non-US dollar currencies against the greenback and the mixed performance of major financial assets, Pang pointed out.

It also indicates that China’s cross-border receipts and payments remained broadly balanced, corporate and household demand to foreign exchange was relatively moderate, and market expectations for the yuan exchange rate tended toward stability, he added.

With continuous easing of cross-border investment and financing procedures, the Chinese market’s attractiveness to foreign capital will keep growing, said Wen Bin, chief economist at China Minsheng Bank. China’s economy is running steady and its resilience has become more evident, providing strong support for forex reserves remaining basically stable, he noted.

Editor: Futura Costaglione