China's one-day Shanghai interbank offered rate, or Shibor, surged the most in five months on speculation cash supplies will become tighter as redemptions of central bank bills decline this week.

The seven-day repurchase rate, a gauge of interbank funding availability, rose for a fourth day as an increase in bank reserve ratios, announced last week, took effect. Some 88 billion yuan ($13.6 billion) of central bank bills and repurchase agreements will mature this week, compared with 115 billion yuan the week before, said Wee-Khoon Chong, a fixed- income strategist at Societe Generale SA in Hong Kong.

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"The cash squeeze worsened today because it's the reserve ratio payment day," said Guo Caomin, a Shanghai-based bond analyst at Industrial Bank Co. "Due to the small amount of maturing bills we probably won't see an obvious easing of the liquidity shortage this week."

The one-day Shibor jumped 297 basis points, or 2.97 percentage points, to 6.96 percent, according to a fixing rate published at 11:30 am in Shanghai by the National Interbank Funding Center. That was the biggest increase since Jan 20.

The seven-day repo, which measures interbank funding availability, jumped 80 basis points to 7.51 percent as of 4:20 pm in Shanghai, the highest level since Jan 31, according to a weighted average rate compiled by the Interbank Funding Center.

The central bank will deposit 50 billion yuan with commercial banks for nine months from tomorrow, according to a statement on its website June 16.

One-year interest-rate swaps, the fixed cost needed to receive the floating seven-day repurchase rate, declined six basis points to 3.77 percent, according to data compiled by Bloomberg.

The yield on the 2.77 percent government bond due May 2012 dropped two basis points to 3.57 percent, according to the Interbank Funding Center.