ECB won't cut deposit rate to below zero, say traders: Reuters poll

BANGALORE Mon Dec 10, 2012 10:29am EST

The Euro currency sign is seen in front of the European Central Bank (ECB) headquarters in Frankfurt December 6, 2012. REUTERS/Lisi Niesner

The Euro currency sign is seen in front of the European Central Bank (ECB) headquarters in Frankfurt December 6, 2012.

Credit: Reuters/Lisi Niesner

BANGALORE (Reuters) - The European Central Bank will not charge banks to park money with it, even if it cuts its key lending rate again, according to a Reuters poll of money market traders on Monday.

Eighteen of 28 money market traders polled on Monday said the ECB would not cut its deposit rate to below zero, which would in effect result in banks taking a charge for keeping their funds with the ECB.

The remainder said it would.

A majority of the traders, 18 of 28, also said the ECB will not expand its asset purchases into a formal quantitative easing program, or using newly created money to buy debt, over the next 12 months.

The other ten said it would.

The wider survey of 30 traders forecast the ECB will allot banks 73 billion euros ($94.4 billion) at its regular weekly refinancing operation, slightly higher than the 70.8 billion euros maturing this week.

The ECB is also expected to lend banks 15 billion euros at its one-month special operation, roughly unchanged from the 15.9 billion euros it lent at a similar operation last month.

(Reporting by Deepti Govind; Editing by Toby Chopra)

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