The People's Bank of China (PBOC), or the central bank, auctioned 50 billion yuan (7.61 billion U.S. dollars) of three-month bills at a yield of 2.7944 percent on Thursday, temporarily easing speculation of an approaching interest rate hike.

The yield on three-month bills stood unchanged from last week at 2.7944 percent.

Also, PBOC sold 60 billion yuan (9.13 billion U.S. dollars) worth of 91-day repurchase agreements to banks on Thursday with a yield of 2.8 percent.

Offsetting the 181 billion yuan (27.55 billion U.S. dollars) of bills and repurchase agreements that matured, PBOC took 49 billion yuan (7.46 billion U.S. dollars) of liquidity out of the money market this week through open market operations on Tuesday and Thursday.

Market analysts have been watching PBOC's open market operations closely this week as the yield of its one-year bill sold on Tuesday exceeded the benchmark interest rate of one-year deposits, which some analysts interpret as a reason for an imminent interest rate hike.

Chen Lan, an analyst with Guotai Junan Securities, said higher yields on central bank bills would boost PBOC's ability to absorb liquidity from the market amidst the country's economic tightening efforts.

"But the hike of interest rates is not an imminent task for the central bank amid the slowdown of China's industrial investment in February, which weakened consumer confidence, and economic uncertainty overseas," Chen said.

China's industrial value-added output grew 14.1 percent in the first two months of this year, the National Bureau of Statistics (NBS) announced on Friday.

The growth rate during the first two months was up by 0.6 percentage points compared to that in December of last year, according to figures released by the NBS.

Chen predicted that PBOC will reduce its frequency to raise banks' reserve requirement ratio in coming months but said the rate hike expectation would continue this year as the government is hoping to curb the red hot property market and soaring inflation.

China's consumer price index (CPI), a main gauge of inflation, rose 4.9 percent year on year in February, adding more monetary tightening pressure to the government.