China Drains Cash Via MLF for Second Month Amid Yuan Concern
- Currency stabilization has been a priority in past month: ING
- Yuan has fallen around 2% this year despite consistent support
Economists say more stimulus will be needed to reach the ambitious annual growth target of around 5%.
Photographer: Lam Yik/BloombergThis article is for subscribers only.
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.