BEIJING - The net increase in foreign holdings of domestic bonds stood at $20 billion in July, soaring 1.4 times from the previous month, data from China's State Administration of Foreign Exchange (SAFE) showed Thursday.

Foreign investors were still highly motivated to allocate RMB assets as cross-border capital flow improved in July, it said.

China's foreign trade also continued to grow rapidly during the period, enabling a 48 percent month-on-month rise in net cross-border capital inflow under trade in goods, the highest level ever recorded in the same period, a SAFE official said.

With the improvement of the internal and external environment, the positive factors for the smooth operation of cross-border capital flows in China will further increase, said the official.

The SAFE data also showed that China's commercial banks saw a net forex settlement deficit of 388.8 billion yuan ($54.5 billion) in July.

In yuan terms, forex purchases by banks stood at around 1.32 trillion yuan, while sales reached about 1.71 trillion yuan, the data showed.