But conditions remained relatively loose, and traders said a mild correction was natural.
"Rates fell very fast recently, so a bit of a rebound now is normal," said a dealer at a major state-owned bank in Shanghai, referring to the rapid fall in money rates following the central bank's cut in commercial banks' required reserve ratios (RRRs) on February 24.
The benchmark weighted-average seven-day bond repurchase rate rose 9.30 points to 3.1778 at midday.
One-year interest-rate swaps were basically flat at 3.14 percent.
Money market conditions often tighten near month's end, as banks stockpile cash in expectation of heavier customer withdrawals and to meet regulatory thresholds. But dealers said the traditional month-end squeeze appeared to be relatively mild.
"This time it doesn't seem so sensitive," said the dealer.
The Ministry of Finance auctioned 50 billion yuan ($7.91 billion) in fiscal deposits at a rate of 6.80 on Thursday, unchanged from a similar auction last month.
That is significantly higher than the 3.30 percent deposit rate offered to normal bank customers, which is mandated by the central bank.
The relatively high rate, which comes despite loose conditions on the money market, may reflect banks' demand for deposits to meet the required loan-to-deposit ratio, said a market researcher at a different state-owned bank. Money market loans, though less costly, don't count towards the LDR.
Beyond short-term factors, uncertainty remains about how long current loose conditions can last.
Net purchases of foreign exchange by China's banks, including the central bank, were 25.1 billion yuan in February this year, compared to 214.5 billion yuan in February 2011. Such purchases have been an important source of base money creation over the last decade.
"Mainly it's because of the fall in foreign exchange purchases," said the researcher, explaining the lack of market confidence that current conditions will last.
The central bank could counteract this decline by cutting RRRs, but dealers and analysts have expressed concern that inflationary pressure is still lurking, which could cause the central bank to proceed cautiously.