"Don't mention it" is an acceptable reply to any expression of thanks (whether for something borrowed or for anything else), although in my opinion, it's a little old-fashioned. "You're welcome" is the standard reply, fine in any situation. We (in AE) also say, informally, "No problem!" Depending on the circumstances, one could also say, "glad I was able to help".
< Comment no longer needed. Cagey, moderator. >