SHANGHAI, Oct 31 Reuters Overnight borrowing costs for some Chinese financial institutions jumped to as high as 50 on Tuesday, as a monthend scramble for cash squeezed liquidity and stressed money markets.

In addition to seasonal factors, the cash shortage was caused by an upcoming flood of government bond issuance, and traders also pointed to market fears of default by cashstrapped institutions.

The highest overnight rate for pledged repo a shortterm financing business hit 50 on Tuesday, according to official interbank data, although the average rate remains modest at roughly 3.6.

Twoday repo rates jumped to as high as 30, and the highest rate for sevenday repos was 12.

The liquidity tightness caught me off the guard, the price suddenly shot up, said a trader at a brokerage.

The jump in rates stirred memories of a June 2013 cash crunch when the overnight repo rate leapt to a historic high of 30 in an event that roiled global markets.

Rocky Fan, economist at Guolian Securities, said that while the 2013 crisis had resulted from China39;s crackdown on shadow banking, the current stress was likely due to a high level of leveraged trades in the money market.

Several traders at small lenders were still seeking to borrow money in later afternoon trading when contacted by Reuters. Some also expressed concern over default in the market, without giving details.

Liquidity is extremely tight today, Caitong Securities wrote in a note to clients.

The brokerage…