Chinese companies experienced a significant increase in capital inflows in September, which was the largest monthly surge in almost two years. This surge was driven by a strategic decision to repatriate funds due to the reduced appeal of dollar-denominated assets caused by US interest rate cuts.

Official data shows that domestic firms sold the highest amount of foreign exchange to banks since December 2021, reversing the trend of substantial dollar purchases seen over the past year. There was also a notable increase in foreign currency settlements for goods trade, indicating a growing confidence in the stability of the yuan. The data also revealed record levels of foreign exchange sales related to securities investments, further highlighting the changing market dynamics as companies adapt to the evolving economic conditions.