By Li Hongmei

Chinese bank liquidity is expected to remain tight ahead of the weeklong Spring Festival holiday despite fresh money injection by the central bank, a brokerage said yesterday.

The weighted-average benchmark seven-day repurchase rate, measuring borrowing cost among banks, rose by 0.09 percentage points from Monday to 5.05 percent yesterday amid low transactions in the week prior to the holiday which starts on Friday.

There was active trading for the 14-day tenors with the rate adding 0.33 percentage points to 6.96 percent.

The market will be closed from Friday to February 6.

The People's Bank of China yesterday injected 150 billion yuan (US$24.8 billion) into the market by auctioning 14-day reverse repo agreements at 4.3 percent. It conducted a combined 375 billion yuan of reverse repos last week, the most since the week before the Spring Festival in February 2013.

Analysts said banks are still concerned about long-term liquidity as the injections aimed to lessen temporary liquidity stress.

"More than 300 billion yuan will be drained from the market in the second week after the Spring Festival as the reverse repurchase contracts mature," Minsheng Securities Co said in a note.

"The central bank will not offer an excessive amount of cash to meet the market's thirst for liquidity. The monetary policies will remain prudent," the brokerage said.