They expect the PBOC to undertake more monetary easing in the second half to ensure that Beijing's 7.5 percent growth target this year is met.

Local media reported on Monday that the central bank's previous targeted cut in reserve requirement ratio, the fund that lenders put with central bank against their loans, for small and micro businesses has been extended to some bigger shareholding banks, including Minsheng Bank and Industrial Bank.

The banks reportedly confirmed that their reserve requirement ratio has been cut by 50 basis points, which will free up around 60 billion yuan of liquidity.

The reports also said that the RRR cut applies to China Merchants Bank as well, which would imply a further liquidity injection of around 15 billion yuan.

"We reiterate our view that policy easing has become a significant macroeconomic factor," Zhang Zhiwei, a Hong Kong-based economist with Nomura Securities, wrote in a note on Monday.

He added that he expects more policy easing measures in the next few months and economic growth to rebound slightly to 7.5 percent in the third quarter and 7.6 percent in the fourth, from 7.4 percent in the second quarter.

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