Key Points – March Report
Liquidity across China’s interbank markets tightened in March, with banks’ more cautious as they look to keep their books healthy ahead of the quarter-end Macro Prudential Assessment (MPA), the latest MNI Liquidity Conditions Index shows.
The Liquidity Condition Index stood at 63.3 in February, up sharply from the 10.0 recorded in February. The higher the index reading, the tighter liquidity appears to survey participants.
- The Economy Condition Index stood at 21.7, sliding from the 8-month high seen in February, as regional Covid outbreaks weigh on sentiment.
- The PBOC Policy Bias Index remained below 50 for an 9 th 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 30 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 Mar 14 – Mar 25.
