China Starts to Pull Cash in Pivot From Crisis Policy Easing
- China’s 1-year interest rate swap rises to highest since March
- PBOC move follows manufacturing activity expansion in May
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China’s central bank looks set to withdraw cash from the financial system in a sign that it’s moving toward normalizing monetary policy as major global peers are forcefully raising interest rates.
The People’s Bank of China slashed its daily short-term liquidity operation to 3 billion yuan ($447 million) this week, the smallest amount since January 2021. At this pace the central bank removed more cash in the first five sessions of this month than it injected toward end-June.