BEIJING — China's foreign exchange reserves fell to $3.2321 trillion at the end of August, down $3.8 billion from a month earlier, official data showed on Sept 7.

The volume went down 0.12 percent from the end of July, said the State Administration of Foreign Exchange (SAFE).

China's foreign exchange market operated smoothly last month, with domestic supply and demand balanced, said Wang Chunying, deputy director and spokesperson of the SAFE.

Wang attributed the August decline in foreign exchange reserves to the combined impact of currency translation and changes in asset prices.

Affected by factors such as the progress of the COVID-19 pandemic and expectations of major countries' fiscal and monetary policies, the dollar index slightly increased, said Wang. Wang added that weakened non-dollar currencies and the change of financial asset prices led to the fall of China's forex reserves.

Despite uncertainty and fluctuations in the global financial situation triggered by the raging pandemic, the Chinese economy maintains a steady recovery. Its development quality continues to improve, which helps with the overall stability of foreign exchange reserves, Wang said.