Dealers said liquidity conditions were not too bad for one-and seven-day repos. Banks had hoarded cash before the new year holiday, which begins on Jan. 23. this year to meet demand, but longer-term repos were under pressure. "We don't feel the money situation is bad now," said a dealer at a Chinese commercial bank in Shenzhen. "The rise in 14- and 21-day rates is because of demand for the new year holiday." Funds are usually tight during the holiday as firms pay staff annual bonuses and shoppers withdraw money for the celebrations. She said the market widely expects money rates to move around recent levels before the one-week Lunar New Year Holiday. But they were still awaiting possible reserve repo business in the coming days, which could drag the money rates down slightly. "It all depends on the central bank's action, otherwise, the repo rates have no potential to move sharply," the Chinese bank dealer said. China's central bank had said it could conduct reverse repo business if necessary to help inject money into the market and would halt bill sales until after the end of the new year in late January. The benchmark weighted-average seven-day bond repurchase rate fell 11 basis points to 3.9751 percent by midday from 4.5190 percent at Tuesday's close, while the 21-day repo rate rose 70 bps to 5.8526 percent. Trading volume in the 7-day contract was at 71 billion yuan on Wednesday morning compared with 77 billion yuan at Tuesday's close, reflecting that cash demand remained limited for now, traders said. Tightenend holiday money conditions pushed China's interest rate swaps up slightly on Wednesday, with the benchmark five-year IRS rising 7 basis points to 2.99 percent. Dealers said moves in the IRS rate could depend on liquidity conditions and policy change. If the central bank conducts a reverse repo in coming days, or cuts banks reserve requirement ratio, the rate may fall further.