Bank of England allots highest amount at 6-month repo since 2020

LONDON (Reuters) -Banks borrowed 5.085 billion pounds ($6.84 billion) from the Bank of England at its weekly indexed long-term repo for six-month funds on Tuesday, the greatest amount since March 2020 when there was a surge of demand at the start of the COVID-19 pandemic.

The BoE has been seeking to increase usage of the facility as it shifts away from a system of excess reserves in Britain's banking system and unwinds much of the 875 billion pounds of quantitative easing gilt purchases it bought from 2009 to 2021.

Almost all the funds were secured with the highest grade of collateral, which allows banks to borrow with no surcharge on top of the BoE's main interest rate.

Last week, the BoE allotted 2.352 billion pounds at the repo.

($1 = 0.7438 pounds)

(Reporting by David Milliken; editing by Sarah Young)