Pep Guardiola explains Man City loan policy amid Cole Palmer reports

Pep Guardiola has sought to explain Manchester City's decision process behind loaning out youngsters, amid reports that Borussia Dortmund are interested in Cole Palmer.

City have one of the finest academies in world football, but of course only a small number of graduates will ever find a way into the first team.

Eight years after the opening of the £200m City Football Academy across the road from the Etihad Stadium, City's investment is bearing fruit.

A number of City's most talented youngsters featured in the City squad that travelled to Barcelona this week, with Cole Palmer, Luke Mbete, Rico Lewis and Josh Wilson-Esbrand all getting minutes on the pitch.

READ MORE: Guardiola says that Bernardo Silva will stay at City this summer

When asked about reports that 18-year-old defender Mbete could join Huddersfield Town on loan, Guardiola said that that was the first he'd heard of the news.

The Manchester Evening News understands that there is a chance that Mbete could depart on loan before the end of the window, but that a move is far from certain.

Guardiola said: "It's important to have rivalry, to see if he's [Mbete] ready to play with us. Some players on loan, like Macca [James McAtee] and Liam Delap, it's important for them to play regularly many many game.

"Because of the competition in their position, maybe it's better as a club, for the players, to realise if they are able to play with us [by going on loan] because the gap between the academy and first team is so big."

However, Guardiola confirmed that Palmer will not be leaving the club this season and will be a member of his first team squad this season.

"Cole isn't going to happen [go on loan] because we can't loan him," Guardiola added.

"He is one step forward