There was no shortage of liquidity in China's interbank market through April, as the People's Bank of China ensured the availability of funds for the real economy through reserve ratio requirement cuts and market operations, the latest MNI Liquidity Conditions Index shows.
The Liquidity Condition Index stood at 14.3 in April, edging up from the 10.0 recorded last month but still far below the breakeven. The lower the index reading, the looser liquidity appears to survey participants.
The Economy Condition Index was little changed from the March level, with more than three-quarters of respondents seeing a pick up from the previous
The PBOC Policy Bias Index rose to modestly, with the central bank's policy seen by some moving from extremely loose to 'prudent'. -
The Guidance Clarity Index climbed, with the central bank seen giving clear indication of its intentions.
"Frequent press conferences and clear and timely announcements are a huge improvement -- the market gets clear signals and guidance," one trader said
The MNI survey collected the opinions of traders at 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 between Apr 13 and Apr 24.
