China Drains Cash From Banking System Amid Yuan (CNY USD) Pressures

China withdrew cash from the banking system for a second consecutive month, signaling its caution toward monetary easing as currency depreciation pressures mount.

The People’s Bank of China drained a net 70 billion yuan ($9.7 billion) of cash via its medium-term lending facility, while holding the interest rate on its one-year policy loans at 2.5%. The operation came even after inflation stalled last month, fueling calls for more stimulus. Officials also reduced liquidity in March via the MLF for the first time since late 2022.