China Taps Another Tool to Drain Excess Cash From Market

China’s central bank is taking a further step to rein in a liquidity glut in its financial system by reducing the amount of medium-term funds it lends out to banks.

The People’s Bank of China is set to withdraw a net 200 billion yuan ($29.3 billion) via its one-year medium-term lending facility in April. That would mark the first withdrawal under this tool since February 2025, according to Bloomberg calculations based on the operation plan released late on Friday. The net drain reflects an operation size that was smaller than the amount of maturing loans.