MNI China Liquidity Index™– Rises To 65.3 in January
Liquidity conditions across China's money markets tightens in January ahead of Lunar New Year, traders say.
Liquidity across China’s interbank market tightened in January, due to increased 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 survey participants reported liquidity tension. Liquidity typically tightens in the month preceding the Chinese New Year holiday.
The higher the index reading, the tighter liquidity appears to survey participants.
- The Economy Condition Index stood at 61.1, picking up from December's 27.1, as sentiment was boosted by Covid re-openings.
- The PBOC Policy Bias Index remained below 50 for a 19th 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 35 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.
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