The People’s Bank of China (PBoC) has withdrawn cash from the financial system for the first time in a year, sending a cautious signal that preserves its policy flexibility as higher oil prices feed through the economy, Bloomberg reported.
In March, the central bank drained a total of CNY 890 billion ($129 billion) in liquidity via short-term open market operations, and absorbed an additional CNY 250 billion through longer-term instruments, including outright reverse repurchase agreements and the medium-term lending facility. Based on Bloomberg’s calculations using official data, commercial banks likely recorded their first net repayment of PBoC loans since last May.
This withdrawal represents a sharp shift from months of liquidity accumulation, as policymakers guide the economy through an early-year growth rebound and mounting pressures from rising oil prices.
