Market Chatter: PBOC Drains Liquidity as Bond Yields Hit 8-Month Low

MT Newswires Live
Jun 02

China's central bank has reduced its daily cash injection to a historic low as authorities move to absorb excess liquidity from the financial system, Bloomberg News reported Tuesday.

The People's Bank of China offered just 200 million yuan through seven-day reverse repos on Tuesday, the smallest amount ever recorded in a daily open market operation, according to the report. This resulted in a net withdrawal of nearly 249 billion yuan.

The move follows a sharp slowdown in loan growth that left banks flush with cash, pushing the benchmark 10-year bond yields to 1.7%, the lowest since August 2025, Bloomberg wrote.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

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