Definition ∞ A Financial Conditions Index (FCI) is a composite measure that assesses the overall tightness or looseness of financial conditions within an economy. It combines various financial indicators such as interest rates, exchange rates, and credit spreads. A tighter FCI typically indicates less readily available credit and higher borrowing costs. This index influences investment decisions and economic activity.
Context ∞ News often references the Financial Conditions Index when discussing central bank monetary policy and its potential impact on broader markets, including digital assets. A tightening FCI can suggest a less favorable environment for speculative assets like cryptocurrencies. Understanding the FCI helps interpret reports on macroeconomic trends and their influence on digital asset valuations.
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