September 10, 2012 / 3:52 PM / 5 years ago

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

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.

-------ALLOTMENT------

ONE-WEEK ONE-MONTH

-------------------------------------------------------

MEDIAN 129 25

MEAN 129 23

MODE 125 25

HIGHEST 160 30

LOWEST 120 10

COUNT 28 26 --------------------------------------------------------

Reporting by Yati Himatsingka; Polling by Namrata Anchan and Shaloo Shrivastava; Editing by Toby Chopra

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