The weighted-average overnight bond repurchase rate edged down one basis point to 2.31 percent at midday on heavy volume, its lowest level since May 2011. The 14-day repo rate, which rose on Friday, despite falls in other tenors, fell 80.97 basis points on Monday to 2.9218. Traders expect loose conditions to persist through March. The People's Bank of China (PBOC) has declined to issue central bank bills so far this year, due to the small volume of maturing bills and tight liquidity prior to the cut in banks' required reserve ratio (RRR) in late February. Traders do not expect the PBOC to resume large-scale liquidity withdrawals through open market operations this month. "The 'keep things stable' feeling coming from the central bank is still pretty big," said a trader at a major state-owned bank in Shanghai. Some analysts have expressed concern that China's declining trade surplus will limit money supply growth, as foreign exchange inflows resulting from the trade surplus have traditionally been a main source of money creation. But traders say the central bank has plenty of room to inject liquidity via further RRR cuts. Still, it remains uncertain whether the PBOC will actually choose to launch further RRR cuts, which would probably be necessary to keep interbank rates at their current low levels. The withdrawal of fiscal deposits in April and May will lead to some tightening. But the experience of December and January, when traders and analysts widely expected a cut in RRR before the Spring Festival holiday in late January, is still fresh in the memory of market participants. Traders also picked up few clues about the direction of monetary policy from Monday's press conference by PBOC governor Zhou Xiaochuan. "The market is still divided. The offer side and the bid side both have force behind them," said an interest-rate swaps trader at a city commercial bank in Shanghai.