Beijing - China's stockpile of foreign exchange reserves rose to between US$1.4 trillion (S$2.09 trillion) and US$1.41 trillion at the end of last month, from US$1.38 trillion in July, a senior official said on Thursday.

Mr Zhang Xiaoqiang, a vice minister of the National Development and Reform Commission, China's planning agency, was speaking to reporters after a news conference.

Last month's rise of US$20 billion to US$30 billion was much slower than the average monthly increase of US$45 billion a month in the first seven months of the year. The stockpile stood at US$1.07 trillion at the end of last year.
China officially announces its reserves once a quarter.

Mr Zhang, who disclosed earlier this month that the reserves were almost US$1.4 trillion at the end of July, gave no reason for the apparent slowdown.

China recorded a trade surplus of US$25 billion last month, the second-biggest on record. Foreign direct investment was steady at US$5 billion.

One possible reason is that 'hot-money' inflows, which had been buoying the reserves, suddenly dried up.

Another explanation might have something to do with accounting changes linked to the initial capitalisation of China's fledgling sovereign wealth fund.

The Ministry of Finance issued 600 billion yuan (S$119 billion) bonds at the end of last month to the People's Bank of China, which transferred in return a corresponding amount of foreign currency assets to the fund, China Investment.

The fund, which has a remit to increase returns on China's reserves by investing in a broader range of riskier assets, is due to formally open for business on Saturday, according to state media. - Reuters.