MNI Indicators: MNI China Liquidity Index - October 2022

Key Points – October Report

Liquidity conditions across China’s interbank markets eased modestly in October, the latest MNI Liquidity Condition Index shows.

The Liquidity Condition Index stood at 46.9 in October, falling from 59.4 in September, with 80% of traders reporting conditions unchanged or easier on last month. The higher the index reading, the tighter liquidity appears to survey participants.

• The Economy Condition Index stood at 53.1, picking up from September’s 48.4 as Covid restriction fears eased somewhat. 
• The PBOC Policy Bias Index remained below 50 for a 16 th consecutive month. 
• The Guidance Clarity Index picked up somewhat, as respondents still claim to understand the signals from the PBOC.

The MNI survey collected the opinions of 32 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 October 10 – October 21.