LONDON The Bank of England allotted 1.2 billion pounds ($1.55 billion)of one-week funds in its short-term repo (STR) operation on Thursday, the second-largest usage of the facility since it launched in October.

The BoE launched the weekly STR last year as tool to help keep money market rates close to its official Bank Rate, while the BoE drains reserves from the financial system as it unwinds its quantitative easing (QE) programme.

So far the STR - through which banks can access cash in exchange for the highest grade of collateral - has been used sparingly, but BoE officials expect it will be used more in future years when reserves become scarcer.

Last week 15 million pounds of funds were allotted via the STR. The peak allotment was 1.5 billion pounds on Jan. 26.

Deputy Governor Dave Ramsden said on Wednesday that the BoE should speed up the pace at which it is unwinding its 800 billion-pound ($1 trillion) QE stockpile of government bonds.

($1 = 0.7748 pounds)

(Reporting by Andy Bruce; editing by David Milliken)