MNI Indicators: MNI China Liquidity Index™ – Tightens To 65.3 In January
Key Points – January Report
Liquidity across China’s interbank market tightened in January, due to increasing cash demands and bond issuance, as economic fundamentals proved resilient and the recovery gathered pace, the latest MNI Liquidity Conditions Index shows.
The Liquidity Condition Index climbed to 65.3 in January, double the reading of 32.9 registered in December. As many as 47.2% of the participants reported liquidity tensions.
The higher the index reading, the tighter liquidity appears to survey participants.
- The Economy Condition Index jumped to 61.1, dramatically up from last 27.1, with 58.3% of traders encouraged by the quick recovery.
- The PBOC Policy Bias Index read 41.7, picking up from last 37.1, with 83.3% of the participants seeing the stance as not changing, while the other 16.7% of the participants expecting a looser policy.
- The Guidance Clarity Index stood at 54.2, following the previous reading of 50.0. Traders all agreed with the signals conveyed by the central bank
The MNI survey collected the opinions of 36 traders with financial institutions operating in China's interbank market, the country's main platform for trading fixed income and currency instruments, and the main funding source for financial institutions. Interviews were conducted January 9 – January 20.