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* Banks to take 300 billion euros at ECB's Sept, Dec TLTROs
* EU Sanctions on Russia will not hurt euro zone economy
* No change expected to deposit, refi rates on Aug 7
By Rahul Karunakar
July 30 (Reuters) - Banks are likely to take up three-quarters of the 400 billion euros of cheap loans on offer from the European Central Bank in coming months, a Reuters poll found, although few expect an ensuing surge in bank lending to companies any time soon.
These analysts, as well as money market traders polled earlier this week and over the past month, do not expect the long-term loans to materially boost euro zone inflation, now languishing at a dangerously-low 0.5 percent.
Annual inflation in Germany, Europe's largest economy, slowed last month, probably pushing the euro zone rate lower. In Spain prices fell 0.3 percent in July.
"Recent comments from a range of ECB officials highlight the central bank's high level of confidence that the measures already announced will have substantial effects. We are less convinced," wrote Paul Mortimer-Lee, global head of market economics at BNP Paribas.
BNP Paribas had been one of the few banks forecasting the ECB would conduct outright bond purchases in a quantitative easing programme like the Bank of England, U.S. Federal Reserve and Bank of Japan. It recently abandoned that call.
The Reuters poll, conducted this week, showed banks are expected to take up 300 billion euros, of the roughly 400 billion euros on offer in the September and December Targeted Long-Term Refinancing Operations (TLTROs).
That was less than the 363 billion euros which euro money market traders expected in a poll taken earlier this week.
But few are convinced this new round of cheap long-term cash for banks will produce a materially different result from the more than 1 trillion euros the ECB auctioned off during the worst of the sovereign debt crisis as an emergency measure.
"Of course, there is going to be strong demand at the TLTROs - banks will take cheap cash anytime it is on offer," said a money market trader.
"But will it help lending? I'm not so sure."
Asked what rate of private sector lending growth would be needed to call the TLTROs a success, the consensus reply from a small sample of economists was 2 percent, a complete turnaround from a reported 1.7 percent annual contraction in June.
Private sector loans in the region have contracted for over two years, suggesting weak demand from firms and households.
But demand for corporate loans is expected to rise in the coming three months as banks in the euro zone eased conditions for lending to corporates in the second quarter for the first time in seven years, the ECB said on Wednesday.
The TLTROs in September and December will be followed by further loans every three months until June 2016, the ECB has said. The deposit rate is below zero and the refinancing rate close to zero, which is effectively as low as rates can go.
None of the 64 economists polled this week expect any change to the refinancing or deposit rates when the Governing Council meets on Aug. 7.
Separately, all but two of 36 economists who answered an extra question said there was a low risk of any negative impact on the fragile euro zone economy by U.S. and EU sanctions on Russia over the crisis in Ukraine.
"The Ukraine crisis is the biggest risk to our otherwise positive outlook for euro zone growth," said Christian Schultz, economist at Berenberg Bank.
"But it should not have a lasting impact on the euro zone as the importance of Russia for trade is low for many western European economies, while Germany, where the exposure is larger, should be able to deal with it." (Additional polling and analysis by Hari Kishan; Editing by Ross Finley and Toby Chopra)