ECB won't cut deposit rate below zero this year: Reuters Poll

Mon Sep 10, 2012 11:50am EDT
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BANGALORE (Reuters) - The European Central Bank will not cut its deposit rate below zero this year, according to a Reuters poll of euro money market traders taken on Monday.

The ECB reduced the deposit rate, which acts as a floor to the cost of money in the open market, to zero in July to deter banks hoarding cash with the central bank instead of lending it.

Twenty-one of 26 traders in the poll said the central bank would not cut it this year, a move that would in effect charge banks to park excess funds with it. Just five said it would.

Traders expect the ECB to allot 129 billion euros ($165 billion) at its weekly seven-day operation this week, a touch higher than the 126 billion euros maturing from last week's tender.

They also expect the ECB to allot 25 billion euros at its one-month fine-tuning operation this week, as much as the amount maturing from last month's tender.




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