Holiday cash demands and regulatory moves ahead of Q3 end see liquidity conditions tighter in China money markets.
Liquidity condition across China’s interbank market tightened modestly into quarter-end, even as the People’s Bank of China injected more funds into the system, the latest MNI Liquidity Conditions Index shows.
The Liquidity Condition Index, rose to 59.4 in September from 53.1 previously, with 34.4% of the participants reporting marginally tighter liquidity condition towards the end of the month. The higher the index reading, the tighter liquidity appears to survey participants.
- The Economy Condition Index stood at 48.4, picking from August's 40.6 after the PBOC and government signaled action.
- The PBOC Policy Bias Index remained below 50 for a 15th consecutive month.
- The Guidance Clarity Index was little changed, as respondents again claim to understand the signals from the PBOC.
The MNI survey collected the opinions of 32 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 September 12 – September 23.
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