PBOC Governor Yi Gang said in an article published in China Finance over the weekend that the nation will maintain "normal" monetary policy for as long as possible, make sure the liquidity remains ample, and facilitate reasonable growth of money supply and social financing.

At the quarterly meeting of the PBOC monetary policy committee, banking authorities called for the monetary policy to be "more precise and targeted", to make full use of structured monetary policy tools and increase the "directness" of its policies, in order to better balance the goals of long-term economic stabilization and risk control.

Since China maintained a conventional monetary policy and avoided too much of policy easing, interest rates remained at a relatively higher level compared with many advanced economies, while inflation expectations were modest during the recent months, said experts.

"Market expectations about China's growth appear to have improved significantly from March onward and are at late-2019 levels, manifesting a true V-shaped (economic recovery)," said Shan Hui, an economist with Goldman Sachs (Asia), in a research note. "But re-pricing in rates since May was mostly driven by changes in the market perception of the policy stance."

As China is still in the process of transitioning from a quantity-based economy to a price-based framework, precisely gauging the monetary policy stance can be challenging as "the central bank utilizes many instruments, balances many objectives, and faces many constraints", said Shan.