The European Central Bank allotted €25 billion in its first-ever tender of six-month refinancing today, in an attempt to ease tight credit conditions on euro zone interbank lending market.
Banks showed very strong demand for the funds, bidding for a total of €103.1 billion, more than four times the €25 billion available.
The lowest successful bid, or marginal rate, was 4.55 per cent.
The average rate paid by successful bidders was 4.61 per cent against the poll forecast of 4.56 per cent.
Banks will receive the funds tomorrow once they have given the ECB appropriate collateral.
The highest rate bid was 4.88 per cent and the lowest 2.00 per cent, half the ECB's current 4 per cent policy rate.
Shortly before the ECB published the results of the auction, six-month Euribor rates for unsecured interbank lending fixed at 4.737 per cent, its highest since late December.
This compares to the 3.989 per cent six-month EONIA swap rate, which approximates to a risk-free cost of borrowing and the current 4 per cent ECB policy rate.