DUBAI, Oct 31 (Reuters) - Saudi Arabian money market rates dropped for a second straight day on Monday after authorities took a series of steps to ease banking system liquidity that had tightened because of low oil prices.

The three-month Saudi interbank offered rate SASAR3MD= fell to 2.34 percent from Sunday's 2.36 percent, bringing its drop over the past two days to 4.2 basis points - the biggest two-day fall since rates began rising in August 2015.

The government suspended its monthly local currency bond issue for October and on Thursday, the central bank introduced a new 90-day repurchase agreement to inject funds into the market when needed.

At least some of the proceeds of the government's record $17.5 billion international bond issue this month are expected to be deposited in local banks, which could further ease liquidity.

(Reporting by Andrew Torchia; Editing by Andrew Heavens) ((; +9715 6681 7277; Reuters Messaging: