MNI China Liquidity Index™ – Rises To 46.0 In July

Key Points – July Report

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

The Liquidity Condition Index stood at 46.0 in July, up from the 35.4 recorded in June. The higher the index reading, the tighter liquidity appears to survey participants.

• The Economy Condition Index stood at 20, the lowest time since February 2020, which was the economy’s post-pandemic low point. 
• The PBOC Policy Bias Index edged lower, dipping back below the 50 mark. -
• The Guidance Clarity Index also edged lower, although respondents still claimed to understand the signals from the PBOC despite the RRR surprise.

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 July 12 – July 23.