China's foreign exchange reserves dropped to 3.201 trillion U.S. dollars at the end of July, down from June's 3.205 trillion, the People's Bank of China, the central bank, said on Sunday.

The data was basically in line with market expectations after an unexpected rise surprised investors in June.

China began to see a falling trend in its forex reserves in November 2015 due to concerns over a weak yuan and capital outflow, but the reserves returned to growth in March as fears eased amid signs of stabilizing economic growth.

China's reserves, the largest in the world, fell to 3.19 trillion U.S. dollars in May, the lowest level in nearly five years.

Forex reserves denominated in Special Drawing Rights (SDRs), an international reserve asset, rose to 2.297 trillion SDRs in July from 2.291 trillion in the previous month, the data showed. China's official gold reserves stood at 78.89 billion U.S. dollars in July, up from 77.43 billion in June, according to the data.