MNI China Liquidity Index™ – Rises To 42.9 In December

Key Points – Dec Report

Liquidity very tightened modestly in December, despite the People’s Bank of China’s surprise RRR cut, the latest MNI Liquidity Conditions Index shows.

The Liquidity Condition Index stood at 42.9 in December, up from the 38.9 recorded in November. The higher the index reading, the tighter liquidity appears to survey participants.

• The Economy Condition Index stood at 8.9,as it fails to recover from the single digit readings seen through much of the Autumn and early Winter.
• The PBOC Policy Bias Index remained below 50 for a 6 th consecutive month.
• The Guidance Clarity Index was little changed, as respondents again claim to understand the signals from the PBOC despite the RRR surprise.

The MNI survey collected the opinions of 28 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 December 6 – 17.