SHANGHAI (Reuters). Despite Beijing’s call for more monetary stimulation to counter a slowdown, China’s central banks kept its borrowing costs for its medium-term policy loans unchanged for the third month.

A statement online by the People’s Bank of China stated that the People’s Bank of China (PBOC), said it will keep the rate of 150 billion yuan ($23.52 trillion) of medium-term loans (MLFs) to financial institutions at 2.85%, if not changed from its previous operation. This is to “maintain sufficient banking system liquidity”.

A Reuters poll revealed that 31 percent of 45 analysts and traders, which is nearly 70%, predicted no changes to the MLF rates.

The markets are now anticipating a decrease in the cash that banks have to hold as reserves. This is after the Wednesday call by the State Council (or cabinet) for timely access to such monetary tools.

Citi, one of the global investment banks, expects that a reduction in reserve requirement ratio (RRR), could occur as soon as Friday. Many others are expecting additional easing measures to come.

Julian Evans-Pritchard is a senior China economist with Capital Economics. “We don’t believe the RRR cuts that are coming soon will be any last easing moves, considering the severe headwinds China’s economy faces,” he said.

We expect another 20 basis point reduction in policy rates this year, as well as an acceleration of credit growth.

Recent rapid spread of COVID-19 has caused lockdowns across a dozen cities in the country including Shanghai. This raises concerns about wider economic disruptions.

Analysts say this means that policymakers will have to provide more stimuli to help the economy reach its growth goal of 5.5% for 2012.

The latest Reuters poll shows that China’s economy is expected to shrink to 5.0% by 2022, amid new COVID-19 epidemics and a weakening global recovery. This puts pressure on China’s central bank to relax its policy.

The MLF loans amounted to 150 billion Yuan and were due to mature on Friday. This operation led directly into zero cash injections into the bank system.

According to an online statement, the central bank also injures 10 billion Yuan via seven-day reverse repos. However, it keeps the borrowing cost at 2.1%.

($1 = 6.3775 )