Key Points – May Report
Liquidity tightened modestly in May, as the People’s Bank of China was perceived maintaining a steady supply of cash, the latest MNI Liquidity Conditions Index shows.
The Liquidity Condition Index stood at 41.7 in May, up from the 34.8 recorded in April. The higher the index reading, the tighter liquidity appears to survey participants.
- The Economy Condition Index remains above 50 but dropped to the lowest level since February 2020 – the economy’s post-pandemic low point.
- The PBOC Policy Bias Index edged higher, but remained below the 50 mark.
- The Guidance Clarity Index was little changed, with only one respondent seeing the central bank as giving a foggier indication 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 May 10 – May 21.
