China's central bank kept its main policy rates on hold on Thursday, opting not to follow rate cut by the U.S. Fed as policymakers wait to see if earlier support measures start to stabilise the economy.

But market watchers say continued support is still needed, and expect more modest forms of policy easing from the People's Bank of China (PBOC) in coming months if pressure on the economy persists.

Amid mounting worries about risks to global growth, the Fed lowered its benchmark rate by a quarter-point on Wednesday, as expected. Though China's central bank does not always follow the Fed's moves in lockstep, some analysts had thought a token PBOC cut, likely in one of its short-term rates, was a possibility. However, no move was apparent by midday on Thursday. The PBOC refrained from daily open market operations (OMOs) early in the session, saying banking system liquidity was "reasonably ample".

"The PBOC skipped OMOs and hence there was no rate adjustment. The market may need to wait until mid-August when the next tranche of medium term lending facility (MLF) matures to see if there is any action. Arguably they can adjust policy parameters anytime, and are not constrained by any meeting schedule, but we see no pressure on OMO rates," said Frances Cheung, head of Asia macro strategy at Westpac.

With household debt climbing and property prices on the rise, policymakers are very cautious about the risks of further loosening, said Zhu Chaoping, global market strategist at J.P. Morgan Asset Management in Shanghai.

But analysts still expect more measured support from the PBOC in the form of additional liquidity injections. Further cuts in banks' reserve requirement ratios (RRR) are seen in both this quarter and next to direct funding to parts of the economy that need it most. The PBOC has already cut RRR six times since early 2018. 

A system-wide "universal" RRR cut, or a policy rate cut, is still possible by the end of the year, Zhu added.