China Drains Cash from Banks for 2nd Month, Prioritizing Currency Stability Over Stimulus Despite Slowing Growth

• China drained cash from banking system for 2nd straight month despite calls for more stimulus

• Seen as attempt to stabilize currency amid depreciation pressures

• Comes even as inflation stalled last month, fueling calls for rate cuts

• But looser policy could weaken yuan further and spur capital flight

• Data due Tuesday expected to show Q1 growth slowed to 4.9% from 5.2% last quarter