MEXICO CITY, May 25 (Reuters) - Mexico's government said it bought back 40 billion pesos ($2.16 billion) of local currency bonds on Thursday, using part of the money it received from the central bank earlier this year to cut its debt.
The central bank held an auction to buy back three different bonds maturing in 2018 and 2019 and saw demand for 98.1 billion pesos, the finance ministry said in a statement.
In March, Mexico's central bank transferred 321.7 billion pesos ($17 billion) of its 2016 surplus to the federal government. The government has to use at least 70 percent of the transfer to reduce debt, according to law.
The ministry said it would keep analyzing market conditions to decide when to use the rest of the funds. ($1 = 18.5170 Mexican pesos) (Reporting by Miguel Angel Gutierrez; Editing by Sandra Maler)