"The November [policy] meeting is coming up – it is very likely that rates will be stable rather than unstable. For reforms to happen you need a stable environment and no uncertainty around liquidity," she said. Next month, China's Community Party is set to hold a key meeting on economic policy to establish a roadmap for reforms over the next few years.
Additionally, with growth in the economy picking up in the third quarter, it is unlikely the government will want to derail the momentum, she added.
(Read more: China acts to ease credit crunch - why the change of heart?)
Viktor Shvets, head of strategy research, Asia at Macquarie said the PBOC has learned a valuable lesson from the liquidity crunch earlier this year.
"I don't expect to see anything like June. Clearly now, there's a struggle within Beijing on how much do we emphasize restructuring, how much do we emphasize liquidity, how much do we emphasize asset bubbles," Shvets said. "[These are] the same problem problems you find everywhere else. It's exactly the same issues in U.S., euro zone, [and] Japan. I don't think China is that dramatically different."
Ed Ponsi, managing director at Barchetta Capital Management believes markets are overreacting to the jump in money market rates.
"Ever since we had the regime change, I think there's been a little bit more transparency. I think it's way too early to panic, if things progress I think we can become concerned but I'm not very concerned about China right now," he said.
—By CNBC's Ansuya Harjani; Follow her on Twitter