Traders said the rates may fall further by the middle of next week, when banks finish paying additional required reserves based on their end-November deposits early in the week.

Thursday's rise in the seven-day repo rate reflected cash calls until that time.

The weighted average seven-day bond repurchase rate dropped 6 basis points to 3.3771 percent by midday from Thursday's close of 3.4379 percent. The overnight repo rate tumbled to 2.6731 percent from 3.0460 percent.

But the 14-day repo rate edged up to 3.3772 percent from 3.3722 percent after plunging a combined 142 bps over the past two trading days to reflect market expectations of loose liquidity, traders said.

"It became difficult to lend money today, with everybody appearing to have lots of money on hand," said a trader at a Chinese state-owned bank in Shanghai. "The seven-day repo is likely to fall far below 3 percent next week."

The People's Bank of China (PBOC) injected a net 379 billion yuan ($61.74 billion) into the market this week, the largest-ever net injection.

The injection means that a net 523 billion yuan will automatically be drained from the money market next week, as reverse repos mature. But traders widely expect the PBOC will roll over most of the maturing reverse repos with new ones.

Money rates have staged a roller-coaster performance since the start of October, with the seven-day repo rate falling to as low as 2.67 percent until cash calls from corporate third-quarter tax payments set in late last week, pushing the benchmark to as high as 4.31 percent by Monday.