Recently, a number of economic indicators, including both official and private manufacturing purchasing managers index are not satisfactory; the market expects domestic economic growth to slow down in the second quarter.

Meanwhile, Brexit has increased uncertainty in global economic and financial outlook; the market speculates that Central Banks around the world will further ease the monetary policy.

Some market institutions suggest that with these internal and external factors, coupled with serious flood problems, China is likely to cut the RRR or even reduce the interest rate within short period of time.

The research team at ANBOUND Consulting on the other hand opines that due to factors like supply-side reforms, loose liquidity and the multiple policy tools available for China's central bank, it is more likely that the central bank will not introduce monetary policies like RRR cut or interest reduction in the near future to prevent causing obstacles to the cutting of excessive industrial capacity, deleveraging and the increase of exchange rate risk, therefore loose policies will not be seen in the near future.