The People's Bank of China (PBC) issued 30 billion yuan ($4.39 billion) in one-year central bank bills Tuesday, 10 billion yuan ($1.46 billion) more than the previous week.

The auction yield was unchanged at 1.9264 percent for an 18th consecutive week, dimming market expectations for a higher yield rate after the unex-pected rise in the three-month central bill rate last week.

The auction rate of 6 billion yuan ($878.43 million) in three-month central bank bills issued May 20 rose to 1.4492 percent from 1.4088 percent, the first increase in four months.

Analysts believe the central bank hopes to stabilize the level of bill rates in the context of tightened interbank liquidity.

The central bank had mopped up no less than 260 billion yuan ($38.07 billion) through open market operations as of Wednesday since January 1, according to an estimate by Industrial Bank.

The outflow of international capital is likely owing to the easing pressure on yuan appreciation, dampening concerns over tightening liquidity, said Lu Zhengwei, a senior economist for Industrial Bank.

The market had forecasted a resumption of the yuan's appreciation around the time of the second round of the China-US Strategic and Economic Dialogue, which was held Monday and Tuesday in Beijing. However, the currency issue was not at the top of the agenda during the dialogue.

US Treasury Secretary Timothy Geithner stated the US respects China's sovereignty with regard to its foreign exchange rate regime during the dialogue, the China News Service reported Tuesday.

The bill auction yields are not expected to rise in the near term while the central bank is likely to reduce its issuance of bills, in a bid to slow the with-drawal of currency from circulation, Lu said.

Analysts have become wary in forecasting an interest rate policy shift in June. "It depends on the central bank's judgment," Lu said.