2nd LD-Writethru: China's forex reserves continue to fall

China's foreign exchange reserves fell to 3.56 trillion U.S. dollars at the end of August, the country's central bank announced on Monday.

The reserves decreased by 93.9 billion U.S. dollars in August, marking the fourth consecutive month of falling forex reserves, according to the People's Bank of China.

But the country's gold reserves climbed from 59.238 billion U.S. dollars at the end of July to 61.795 billion U.S. dollars at the end of August.

China's forex reserves fell by 40 billion U.S. dollars in the second quarter, marking a seven-quarter low and a fourth consecutive quarterly drop.

Fuelled by exports, forex reserves had grown for more than a decade before beginning their decline in the third quarter of 2014.

Guan Tao, former head of the international payments department at the State Administration of Foreign Exchange, said one reason for the fall in forex reserves is the rising U.S. dollar, which cut the value of non-dollar assets in the reserves.

Another reason is that individuals and enterprises have been increasing their forex deposits and assets, Guan said.

More individuals and enterprises are willing to hold U.S. dollars, resulting in dropping forex reserves, said Xie Yaxuan, chief analyst with China Merchants Securities.

If the United States hikes interest rate as expected in September, China's forex reserves may continue to fall, Xie said. Endi