China's overnight money rate jumps to 4-month high, policy rate in focus

China's short-term money rates jumped to four-month highs on Thursday, driven up by rising seasonal cash demand, as the market's focus shifts to whether the central bank will trim policy rates to cushion the economic slowdown.

The volume-weighted average of overnight repurchase agreements, or repos, traded in the interbank market rose to 2.2291%, the highest since Sept. 14.

Traders attributed higher borrowing costs to tighter cash conditions against the backdrop of reduced cash supply from big banks in the market as most lenders had to shore up their cash positions ahead of quarterly tax payments in January.

"Cash conditions started to tighten in