Key Points – August Report
China’s interbank market liquidity tightened in August, but remained ample as the People’s Bank of China (PBOC) ensured funds were available to support the economic recovery. However, traders' outlook on the economy fell to the lowest point since May 2022 as authorities struggled to inspire confidence with recent policy announcements, the latest MNI Liquidity Conditions Index showed.
- The MNI China Liquidity Condition Index climbed to 44.9 in August from July’s 35.9, with 23.1% of traders reporting tighter conditions.
- The MNI China Economy Condition Index fell to 25.5 in August, following 37.2 in July, marking the lowest point in 15 months, with 59.0% of participants noting a lack of confidence in the economy.
- The MNI China PBOC Policy Bias Index read 38.5 with 76.9% of local traders expecting the PBOC will maintain prudent monetary policy, and 23.1% anticipating further easing.
The MNI survey collected the opinions of 39 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 August 14 – August 25.
