March 17, 2020 / 11:06 AM / 11 days ago

Bank of England reports strongest demand for six-month funds since 2016

LONDON, March 17 (Reuters) - Banks took up the largest total of six-month sterling funds from the Bank of England since March 2016 on Tuesday, in a sign of demand for cash as the coronavirus crisis hammers financial markets.

The BoE allotted 3.679 billion pounds ($4.45 billion) in its weekly indexed long-term repo operation, the largest amount since it started holding weekly operations in March 2019, and the largest for any operation since March 2016, when they took place monthly.

The BoE received bids worth 4.369 billion pounds, the BoE said in a statement.

Most of the bids, and funds allocated, were secured against the lowest-quality tier of collateral accepted by the BoE. The BoE provided these funds at an interest rate 17 basis points higher than the its 0.25% main interest rate. ($1 = 0.8258 pounds) (Reporting by Andy Bruce, editing by David Milliken)

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