ECB loans EUR 18.3 bn to banks at ultra-cheap rates

(FRANKFURT) - The European Central Bank said Friday it lent around 18.3 billion euros ($20 billion) to 55 banks in a sixth round of special liquidity measures aimed at reflating the eurozone economy.

The ECB unveiled its so-called Targeted Longer Term Refinancing Operations or TLTROs last year, under which it makes cheap cash available to banks for a period of three years on condition they lend it on to the real economy.

It has so far conducted six such operations.

The take-up of the funds in the first three TLTROs was watched closely for signs that lending in the single currency area might finally be picking up.

But the TLTROs have now taken more of a back seat following the ECB's much grander scheme of bond purchases to pump more than 1.5 trillion euros into the economy -- at a rate of 60 billion euros per month -- and push up the rate of inflation in the euro area.

The ECB said that 55 banks had bid for 18.303 billion euros in funds in the latest TLTRO, compared with 88 banks for 15.6 billion euros in the previous one in September.

The banks are obliged to lend on the borrowed money to companies and businesses, as the continued weakness of credit activity is seen as one of the key factors in the still very tentative economic recovery in the 19 countries that share the euro.