External debt rises to $1.67t by March

Outstanding foreign debt rose to 10.28 trillion yuan ($1.67 trillion) by the end of March in China this year, with yuan-denominated debt accounting for 48.1 percent of the total, the country's forex regulator said on Friday.

Yuan-denominated foreign debt stood at $804 billion at the end of March, while debt in other foreign currencies fell by 3 percent from $895.5 billion, the State Administration of Foreign Exchange said.

According to the regulator, the growth in the yuan-denominated debt reflects the significant progress in the internationalization of the yuan and the currency's rising popularity for cross-border settlements since July 2009. Higher yuan deposits by foreign financial institutions contributed to the growth in yuan debt holdings, it said.

Excluding the yuan-denominated borrowing, China's foreign debt saw a 2.5 percent growth in 2014, compared with the 17.12 percent increase seen in 2013 and the 6.04 percent increase in 2012, according to the official data.

Short-term debt, which edged up to $1.18 trillion by the end of March from $621.1 billion at the end of 2014, accounted for 70.5 percent of the total foreign debt, compared with the 69.4 percent earlier, the SAFE said.

The nation's short-term debt accounted for about 31.98 percent of the foreign exchange reserves till March, up from 17.8 percent in 2014.

Total foreign exchange reserves fell by $40 billion in the second quarter to $3.69 trillion, less than the $113 billion drop in the first quarter. However, it was the fourth straight quarter of decline.

"China's foreign debt has limited risk," the People's Bank of China, or the central bank, said in a statement on its website. The yuan-denominated statistics figure is a necessary requisite as per the International Monetary Fund's Special Data Dissemination Standard. "It will further improve the data quality and transparency," the regulator said.

The SAFE also released data on China's gold reserves, which rose to 53.31 million fine troy ounces (1,658 metric tons) by the end of June, an increase from 33.89 million fine troy ounces (1,054 tons) or 57 percent since 2009, when it last updated the figures.

China has overtaken Russia to become the fifth-largest country in the world in terms of bullion assets. The United States has the biggest reserves of 8,133.5 tons, data from the World Gold Council show. The increase in gold reserves will help ensure security, liquidity and the value of global reserves, the central bank said.

China is the world's largest gold producer and along with India is the top consumer of the metal. The amount of the yellow metal it last held as per available data was just 1 percent of its foreign-exchange reserves and the same has seen significant growth in the last decade.

Gold prices posted an annual decline last year for the first time since 2000 as the dollar rallied on speculation the US Federal Reserve will raise interest rates for the first time since 2006.

Bloomberg contributed to this story.