PBOC Pulls $129 Billion in Biggest Weekly Withdrawal Since 2013
- Money-market rates hold ground as RRR cut helps fill gap
- Central bank doesn't want excessive liquidity, Huachuang says
The Shift in Chinese Policy and Market Sentiment
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China’s central bank drained the most funds from the financial system in three years, mopping up excess cash after a reserve-requirement ratio cut earlier this week boosted liquidity.
The People’s Bank of China pulled a net 840 billion yuan ($129 billion) in the five days through Friday, data compiled by Bloomberg show. While that was the biggest weekly withdrawal since February 2013, money-market rates barely reacted with the RRR reduction releasing an estimated 685 billion yuan into the banking system. The PBOC kept its open-market seven-day interest rate unchanged at 2.25 percent on Friday.