China's short-term lending rates slumped Wednesday on expectations of another short-term liquidity injection, after the central bank asked commercial banks about demand for reverse bond repurchase agreements.

The central bank may inject funds via reverse repos to boost liquidity Thursday, dealers said, after it surprised the market by injecting 143 billion yuan ($22.51 billion) through such operations Tuesday.

"This time, the central bank is really generous. Rates are falling," said a dealer at a local bank in North China.

But market players said they still harbor doubts about whether the reverse repos can provide a sustained boost to market liquidity, given their short duration. Tuesday's auctions were for seven- and 14-day tenors, and Thursday will likely be the same.

Given the strong liquidity pressure many banks are now facing, some traders expect a cut in banks' reserve requirement ratio (RRR) this month.

On July 5, banks will make regular payments to meet their RRR obligations. The payment is expected to be bigger than usual due to a surge in deposits at the end of June, dealers said.

Banks adjust their RRR payments on the 5th, 15th, and 25th of each month.