MNI China Liquidity Index™ – Falls To 35.7 In October

Key Points – October Report

Liquidity across China’s interbank money market eased in September, the latest MNI Liquidity Conditions Index shows.

The Liquidity Condition Index stood at 35.7 in October, down from the 79.6 recorded in September. The higher the index reading, the tighter liquidity appears to survey participants.

• The Economy Condition Index stood at 7.1, recovering modestly from 5.6 previously, which was the lowest reading since dropping to 0 in February 2020, the economy’s pandemic-era low point. 
• The PBOC Policy Bias Index edged higher, but still sitting below the 50 mark. 
• The Guidance Clarity Index also edged higher, although was overall little changed on levels seen in recent months. 
• Despite the economy seen slowing, long-term bond yields are seen higher over the next 3 months

The MNI survey collected the opinions of traders with financial institutions operating in China's interbank market, the country's main platform for trading fixedincome and currency instruments, and the main funding source for financial institutions. Interviews were conducted Oct 11 – Oct 22.