MNI China Liquidity Index™ – Rises To 34.8 In April

Key Points – April Report

Liquidity tightened modestly in April, despite the People’s Bank of China being perceived as maintaining an ‘ample’ supply of cash, the latest MNI Liquidity Conditions Index shows.

The Liquidity Condition Index stood at 34.8 in April, up from the 26.2 recorded in March. The higher the index reading, the tighter liquidity appears to survey participants.

• The Economy Condition Index slipped from recent highs, falling to the lowest reading in 12 months as some concerns grow over the longevity of the recovery. 
• The PBOC Policy Bias Index edged lower, although most respondents saw no change in the PBOC’s bias. 
• The Guidance Clarity Index edged lower, with no respondents seeing the central bank as giving foggier indications of its intentions and the majority seeing no change in guidance opacity.

The MNI survey collected the opinions of 21 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 March 15 – March 26