A magistrate from the Madrid regional courts quizzed the former politician from the ruling Popular Party and ex-banking chief on Tuesday for over three hours before granting him bail and confiscating his passport.
In a statement released on Tuesday, judicial authorities said Rato must report to the court once a month. It said he could still travel within the European Union using his Spanish identity card. The judge announced the decision after quizzing Rato for three hours.
Rato, 66, a former leading light of Spain's ruling conservative Popular Party, is the target of several judicial probes which have embarrassed the government ahead of a December 20 general election.
He was Spain's finance minister under ex-Prime Minister Jose Maria Aznar from 1996 to 2004 and headed the IMF from 2004 to 2007.
Rato is also being investigated for alleged fraud during his time as chief executive at Bankia, a Spanish lender bailed out by the government in 2012.
The near-collapse of Bankia almost brought down Spain's whole financial sector, which was bailed out later that year by international creditors for €41 billion ($44 billion).
He has also been questioned in court as part of a third probe into alleged spending sprees on company credit cards by him and other ex-managers of Bankia.
Rato has denied any wrongdoing in the cases. None of the investigations have yet gone to trial.