Speculation mounted on Friday that the People's Bank of China (PBOC) would announce a rate or RRR cut, or even both, over the weekend in the wake of a slew of weak economic data.

 "Investors are disappointed to some extent," said a trader at an Asian bank in Shanghai. "While expectations of a PBOC easing, in particular of an RRR cut, still linger, they have somehow been weakened now."

The benchmark seven-day repo rate edged up to 3.3434 percent at midday from 3.2955 at Friday's close, while the 14-day rate rose slightly to 3.2676 percent from 3.2373 percent.

The overnight rate, however, fell to 2.4461 percent from 2.6676 percent, indicating an abundance of short-term liquidity, traders said.

"Major banks have plenty of cash on hand," said a trader at a major Chinese state-owned bank in Shanghai.

"But as the central bank appears to be reluctant to ease policy too aggressively, most institutions are willing to store some money as long as rates are not so high," she said. "This has set a floor for the seven-day repo rate."

Traders said the market was also watching how the PBOC will conduct open market operations this week after it had used reverse repos to inject money into the market over the past several weeks.

A total of 100 billion ($16 billion) yuan in PBOC reverse repos will mature this week, draining money from the market, but a combined 35 billion yuan in PBOC maturing bills and standard repos will inject money, leaving a net 65 billion yuan set to be drained from the market this week in the absence of further open market operations.

China's interest rate swaps rose on Monday, hit by the disappointment at the PBOC's inaction in monetary easing, with the benchmark five-year IRS rising 12 basis points to 2.85 percent by midday.