PBOC withdraws cash from banking system

China’s central bank on Tuesday withdrew US$4.81 billion (RMB30 billion) from the banking system, the first time in eight months it tightened cash supply to control inflation, The Wall Street Journal reported. The central bank offered 28-day repurchase agreements, a method of borrowing from commercial lenders in the interbank market, and a policy tool not employed since June. The step marks a reversal of activity by the central bank, following months of monetary easing. The previous cash injections were intended to lower borrowing costs for firms as the economy slid in 2012, but recent figures have shown an acceleration in growth.