MNI Indicators: MNI China Liquidity Index™ – January Liquidity High

Key Points – January Report

China's interbank liquidity eased in January to the most relaxed conditions since December 2022, as the central bank made MLF and OMO adjustments, while unexpectedly cutting the RRR to support sentiment, the latest MNI China Liquidity Index showed.

On the economy, traders' expectations for further PBOC easing reached its highest since March 2020 following mixed economic data in December.

• The MNI China Liquidity Condition Index dropped to 34.1 in January, from 41.5 previous, with 46.3% of traders reporting easer conditions. 
• The MNI China Economy Condition Index read 59.8 in January, down from 64.6 in December, with the percentage of traders believing conditions had improved dropping to 36.6% from 46.3% previous. 
• The MNI China PBOC Policy Bias Index read 31.7, with 36.6% of local traders expecting further easing, the highest since March 2020.

The MNI survey collected the opinions of 41 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 January 15 – January 26.