The PBOC's first RRR cut this year took effect on Friday, injecting about 400 billion yuan ($63.5 billion) into the financial system as money market rates jumped to a one-month high last week on tight liquidity. The cut helped push the rates down sharply on Friday, which was likely to prompt the PBOC to drain money, traders said. The central bank on Monday asked commercial banks about demand for three-month bills, 28-day and 91-day bond repurchase agreements, indicating it was ready to restart bill sales this week, traders said. The PBOC has suspended bill issues in its regular open market operations since late last year in a move to help the market tide over a shortfall in flows due to factors such as cash calls during the Lunar New Year in late January. "It's become very easy to borrow money today after the RRR took effect," said a trader at a Chinese commercial bank in Shanghai. "Had the central bank not signalled that it could possibly drain money via resuming a three-month bill issue, the seven-day repo rate would have dropped even more." The weighted-average seven-day bond repurchase rate dropped 82 basis points to 3.6597 percent from 4.4810 percent at the close on Friday when it slumped 102 bps. The shortest overnight repo rate fell to 3.0263 percent from 4.6424 percent. Traders said they expected that the seven-day repo rate would see a floor around 3.5 percent if the PBOC resumes bill sales this week. China's interest rate swaps were largely stable on Monday, with benchmark five-year IRS edging down 1 bp to 3.37 percent by midday. IRS have largely moved sideways for the past two weeks after they jumped earlier this year in response to signs an aggressive PBOC monetary easing to boost the economy may not happen in the first quarter, traders said.