Key Points – March Report
China’s interbank market liquidity condition remained easy in March, tightening just a little on the previous month, despite the central bank net-draining funds for the first time in 15 months and banks facing a quarterly macro-prudential assessment (MPA), the latest MNI Liquidity Conditions Index showed.
Traders however remain concerned by a lack of demand in the economy despite some bright spots in February’s data.
- The MNI China Liquidity Condition Index was 33.3 in March, up modestly from February’s 22 month low of 26.8.
- The MNI China Economy Condition Index stood at 54.8 in March, down from 56.1 in February, with 21.4% of participants seeing conditions getting worse, and 47.6% saying no change from previous.
- The MNI China PBOC Policy Bias Index came in at 26.2 with 52.4% of local traders seeing a continuity of current stance, while 47.6% traders believed policy was moving towards a more accommodative policy.
The MNI survey collected the opinions of 42 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 from March 11 – March 22.
