Key Points – May Report
Liquidity eased modestly in June, 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 35.4 in June, down from the 41.7 recorded in April. The higher the index reading, the tighter liquidity appears to survey participants.
- The Economy Condition Index slipped below 20 for the first time since February 2020 – which the economy’s post-pandemic low point.
- The PBOC Policy Bias Index edged higher, inching above the 50 mark for the first time in 4 months.
- The Guidance Clarity Index also edged higher, with no 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 June 14 – June 25.
