SHANGHAI - China's borrowing costs between banks plummeted on Monday, returning to normal levels after rising to about 9 percent last week.

The Shanghai Interbank Offered Rate overnight dropped 215.50 base points to 4.81 percent, suggesting eased cash flow among China's financial institutions.

However, the fixing repo rate 7-day, another gauge of borrowing costs in China, rose 8 base points to 6.89 percent by 11 am Monday.

"Cash flow may not be as tight as last month. It all depends on the central bank's open market operations," said Song Qiuhong, a fixed-income analyst at Shunde Rural Commerce Bank.