SHANGHAI, July 22 (Reuters) - Chinese money rates rose on Tuesday as investors borrowed funds in the money markets to subscribe for a wave of initial public offerings (IPOs) later this week, traders said.
The weighted average of the seven-day bond repurchase agreement stood at 3.94 percent at midday, up from Monday's 3.85 percent.
Another actively traded maturity, the 14-day repo , rose to 5.18 percent from 5.06 percent.
Eleven companies will take IPO subscriptions on Wednesday and Thursday, with local media estimating they could possibly lock up as much as one trillion yuan ($161 billion) in funds until early next week.
"Some investors are borrowing money to prepare for the IPO subscriptions," said a trader at an Asian bank in Shanghai. "That is the main reason driving up money rates temporarily."
Because of the temporary shortage of funds in the money markets, the Chinese central bank abstained from usual open market operations to drain money on Tuesday.
The pause in operations also comes amid less liquidity as only 18 billion yuan in the central bank's forward repos are set to mature this week, down from 55 billion yuan last week.
Such repos automatically inject money into the markets.
In another regulatory move to support market liquidity this week, the Ministry of Finance said on Monday that it would auction 50 billion yuan in three-month deposits to commercial banks on Thursday.
$1 = 6.2057 Chinese yuan Reporting by the Shanghai Newsroom; Editing by Jacqueline Wong