SHANGHAI (Reuters). China’s central banks kept some of their policy rates in place during a liquidity operation on Tuesday. Investors believe that policymakers might resume monetary easing shortly to help the cooling economy.

It comes just days before the U.S. Federal Reserve will likely announce its first interest-rate hike in three decades. Analysts believe Beijing wants to keep policy divergence at bay for now.

People’s Bank of China (PBOC), stated that it will maintain the interest rate at 200 billion yuan (31.44 Billion USD) for one-year, medium-term loans (MLF) to certain financial institutions at 2.85%. This is unchanged from previous operations.

Operation resulted in an injection of net 100 billion dollars in fresh funds. This was in addition to the 100 billion that matured on Tuesday. According to an online statement, the PBOC attributed this move to maintaining sufficient liquidity in banks.

A Reuters survey revealed that most traders and analysts expected a decrease in the MLF rate over one year.

Mizuho Bank chief Asian FX strategist Ken Cheung stated that the PBOC had not adjusted its key interest rates prior to the Fed’s policy conference, where the U.S. central banks is widely expected raise rates.

Cheung stated that “The PBOC will further ease monetary policies by lowering the policy interest rates to achieve the government’s annual target of 5.5%,”

When China’s first quarter growth report comes out, he expects that the PBOC will reduce its MLF rate.

The major central banks of the world, Japan, Britain, USA, and Japan will meet next week. They are likely to shift to hawkish stances in monetary policies. China’s policy divergence may lead to capital flight risks.

Marco Sun of MUFG’s chief financial markets analyst argued that lowering MLF may not be enough to bring about desired credit demand improvements.

Sun stated that the PBOC might wait until January to assess the impact of the key rate cuts before adding that he sees banks still being able to reduce the lending benchmark prime rate (LPR).

In addition, 10 billion yuan was also transferred by the central bank through seven-day, reverse repos. The goal of this is to repay the same loan amount due on the same date. Borrowing costs are maintained at 2.1%.

($1 = 6.3607 )