ECB pumps 70 bln euros into money markets

FRANKFURT, Sept 16 (Reuters) - The European Central Bank pumped 70 billion euros into money markets on Tuesday as demand from banks topped the 100 billion mark amid signs interbank lending had frozen.

It was more than double the amount it allotted on Monday and effectively adds 40 billion to the funds it has now shovelled into money markets since they were shaken by the collapse of Lehman Brothers and the sale of Merrill Lynch MER.N to Bank of America BAC.N.

Demand for the overnight variable rate funding rose to 102.48 billion euros. The ECB said that the money was lent at an average interest rate of 4.40 percent with 56 banks taking part in the auction.

The ECB said on Monday it stood “ready to contribute to orderly conditions in the euro money market”, shortly before pumping 30 billion euros into the system, although funding hungry banks would have sucked up more than three times that amount.

For more details please double click ECB23 (Reporting by Marc Jones, editing by Patrick Graham)