According to the figures provided by the Chinese central bank by the end of March its foreign exchange reserves increased by 16% to $1.9537 trillion on a year-over-year basis. In a notice on its website the bank said that China’s reserves rose by $7.7 billion in the first quarter which is $146.2 billion less than the same period last year.

The report says that in March reserves rose by $41.7 billion which is $6.7 billion more than the same period last year. China's official Xinhua News Agency noted that the increase was substantially less than the fourth quarter increase of almost $45 billion which is attributed to the slowing exports against the background of the weak economy.

According to the analysts’ estimates China no holds up to 70% of its foreign reserves in U.S. dollar-denominated assets, including Treasury securities. The immense volume of reserves is explained by the central bank's buying up dollars generated from its huge trade and influx of foreign investment.

Meantime the Treasury Department said Friday that the budget deficit increased by $192.3 billion in March, and is near $1 trillion. The deficit already totals $956.8 billion for the first six months of the budget year, also a record for that period. The Obama administration projects the deficit for the entire year will hit $1.75 trillion.