China Drains Funds From Banking System as Cash Crunch Eases
- Key money market rate retreats to lowest level in two weeks
- Days ago China fended off its worst cash crunch in 5 years
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China drained funds from the financial system after a key cost of short-term borrowing tumbled from its highest level since 2015, showing officials remain wary of excess liquidity.
The People’s Bank of China withdrew a net 80 billion yuan ($12 billion) of liquidity on Wednesday. The central bank offered just 100 billion yuan of seven-day funds even as 180 billion yuan matured. That means 480 billion yuan will now come due before the Lunar New Year holiday starts next week.