China makes biggest-ever weekly cash withdrawal

China’s central bank withdrew US$146 billion (RMB910 billion) from the country’s financial system in its largest-ever weekly cash drain, Financial Times reported. This week China allowed US$137.70 billion in reverse repurchase agreements to expire, thereby canceling the effect of short-term liquidity measures taken before the week-long lunar new year holiday, when cash withdrawals surge. The step marks China’s attempt to rein in a surge in credit growth on fears of inflationary pressure. Chinese lending increased to a record US$400 billion in January, exceeding monthly figures in early 2009 during the government’s stimulus program to counteract the financial crisis.