May 9 (Reuters) - Soaring demand from banks for liquidity from Bank of England market operations is not a surprise while the central bank engages in its quantitative tightening programme, Deputy Governor Dave Ramsden said on Thursday.
Last week the BoE lent more than 12 billion pounds of one-week funds through its Short-Term Repo (STR) operation, launched in October 2022 to ensure banks can retain access to central bank reserves while it reduces the size of its balance sheet.
"There's always going to be stuff happening in the repo market, but the STR is doing its job," Ramsden told reporters at a news conference after the BoE's May interest rate meeting.
"We're not seeing some ratcheting up more in (money market) rates that might make you think 'Oh right, so reserves are becoming a bit scarce'."
Reporting by Andy Bruce; editing by Sarah Young
