China's foreign exchange reserves reached a two-year high of $3.238 trillion as of the end of last year while gold reserves increased for the 14th consecutive month, the State Administration of Foreign Exchange said.

The country's foreign exchange reserves were up by $66.2 billion, or 2.1 percent, compared with the end of November, SAFE said on Sunday, marking the second consecutive month of increase and hitting the highest level since December 2021, when the country’s foreign exchange reserves came in at $3.25 trillion.

The administration attributed the rally in foreign exchange reserves to a weakening US dollar and rising global financial markets.

Meanwhile, China's official gold reserves reached 71.87 million ounces at the end of December, up from 71.58 million ounces a month earlier, marking the 14th consecutive month of increase, according to SAFE.

For the full year of 2023, the country's foreign exchange reserves rose by $110.29 billion while gold reserves were up by 7.23 million ounces.

The administration added that China's economic recovery and progress in high-quality development will help the country's foreign exchange reserves stay generally stable going forward.

Wen Bin, chief economist at China Minsheng Bank, said the country's rising resilience in foreign trade and recovering capital inflows amid narrowing US-China interest rate differentials will set the stage for the country's foreign exchange reserves to further recover.