FRANKFURT, Sept 18 (Reuters) - Euro zone banks showed huge demand in the European Central Bank's first-ever tender of overnight U.S. dollar funds on Thursday, part of global central bank efforts to ease money market tensions.
Some 61 banks bid for $101.68 billion in funds, compared to the $40 billion that the ECB had said it intended to allot.
The ECB allotted the funds at a single rate of 4.00 percent, the highest rate at which it could find takers for the full $40 billion, after it invited banks to submit bids in a Dutch auction procedure.
The U.S. Federal Reserve's key interest rate is 2 percent, and overnight funds were being offered in Europe at an indicative bid/ask spread of 2-3 percent according to Reuters data before the auction.
The world's top central banks said on Thursday they will pump more than $180 billion in extra dollar funds into global money markets in a coordinated effort to ease a funding squeeze triggered by the upheaval on Wall Street.
Demand for dollars at the ECB's auction was far stronger than that at one held by the Bank of England earlier on Thursday, when the BoE could find takers for little more than a third of the $40 billion it could have lent.
The BoE allotted funds at rates of 1.9 percent and above for a weighted average rate of 3.802 percent.
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