BEIJING (BLOOMBERG) - China's foreign-exchange reserves slipped to the lowest level since late 2011 as a rallying dollar ate into the value of its holdings.

The world's largest currency hoard fell by US$28 billion (S$38.04 billion) to US$3.19 trillion in May, the People's Bank of China said in a statement Tuesday.

"Depreciation expectations faded and the central bank didn't burn its reserves to intervene in the foreign exchange market," said Li Wei, a China and Asia economist at Commonwealth Bank of Australia in Sydney. "The drop was largely due to the valuation effect of a strong dollar, which leads to the depreciation of other currencies."

That was confirmed by the reserves figure denominated in International Monetary Fund Special Drawing Rights, which rose to 2.28 trillion units from 2.27 trillion in May.

Despite fresh weakness against the greenback, the PBOC hasn't had to deplete its cash to support the yuan as some stability returns to the currency. While reserves have been generally steady this year, halting the steep decline of 2015, the May tally extends the decline to 20 percent from the near US$4 trillion peak in June 2014.

Both the Japanese yen and euro weakened against the greenback last month, weighing on the value of the reserves, which are reported in U.S. dollars.

The yuan posted its biggest two-day drop versus peers since February, spurring speculation authorities are weakening the currency to counter a slowing economy. The Chinese currency has fallen 0.8 percent against a trade-weighted basket this week to the lowest level since October 2014.

"The market was pretty calm as the yuan depreciated," Liu Dongliang, a senior analyst at China Merchants Bank Co. in Shenzhen, said before the data release. "The central bank didn't interfere in any significant way."