Beijing, Dec 21 (IANS): China's foreign exchange market activity has declined this year, according to a report released by the Chinese Academy of Social Sciences (CASS).

Total transaction volume of the spot foreign exchange market in the first three quarters was $2.6 trillion, marking a 5.1 percent drop year on year, the CASS's Blue Book on Finance said.

Accompanying the weakening was a boom in swap transactions and an increasing number of transactors in the market, Xinhua quoted the blue book as saying.

According to the book, China's total foreign exchange reserves reached $3.29 trillion at the end of September.

The slowing increase in foreign reserves has abated the impact of foreign reserve rises to China's domestic monetary policies, and there is no need for the Central Bank to issue central bank bills to ease liquidity in the market, the blue book said.

This means the independence of China's monetary policies has been enhanced, it said.