China is due to release a series of economic reports, including the consumer price index (CPI) for July, which is expected to fall to a 30-month low of 1.7 percent from a year earlier.

Although the PBOC has disappointed money markets so far by resisting calls to cut reserve requirement ratios at commercial banks -- which would result in a sustained liquidity injection -- dealers expect the central bank to loosen monetary policy if July's economic data shows slowing inflation.

"The CPI figures are very likely to come in according to expectations," said a dealer at an Asian bank in Shanghai. "Now, we are just waiting for the RRR cut."

China's central bank often announces RRR cuts on Fridays or over the weekend.

The benchmark seven-day repo rate was at 3.2654 percent at midday, inching up from 3.2524 at Tuesday's close, while the overnight rate rose 1.07 basis points to 2.5562 percent, up from Tuesday's 2.5455 percent.

The 14-day rate fell 2.5 bps to 3.3855 percent from 3.4105 on Tuesday.