China has taken steps to publicly explain the recent surge in its foreign exchange reserves, already the world's largest, which rose in the first quarter of this year by more than half the total increase of 2006. Wu Xiaoling, a deputy governor of the People's Bank of China, said the first quarter rise of US$135.7 billion to US$1.2 trillion, was due to a number of factors on top of the sharp rise in the trade surplus, state media reported. She said another reason is the unwinding of swap agreements between the central bank and Chinese commercial lenders, which had resulted in foreign exchange being kept off the PBoC's books. Lastly, Wu said some of the funds raised in the last 18 months in huge offshore initial public offerings by Chinese banks and other enterprises have been brought back onshore, driven by the desire to take advantage of the rising renminbi. Analysts have said higher reserves are also due to interest earned on existing holdings, and the impact of currency revaluations on its portfolio of currencies.