Reuters poll: ECB's next
move after April will be further quantitative easing
reduction - traders
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[January 09, 2017] (Reuters)
- The European Central
Bank's next policy move after April, when it is due to
reduce monthly bond purchases, will be to cut the size
of the quantitative easing program further, a Reuters
poll of money market traders found on Monday.
The headquarters of the European Central Bank (ECB) are
illuminated with a giant euro sign at the start of the "Luminale,
light and building" event in Frankfurt, Germany, March
12, 2016. EUTERS/Kai Pfaffenbach/File Photo
However, a significant minority of respondents said they
expected the program to be expanded again.
The ECB last month announced it would buy 60 billion euros worth
of bonds a month from April, down from 80 billion euros now,
citing signs of economic stabilization and rising inflation.
Euro zone inflation rose to 1.1 percent in December.
Asked what would happen after that, 11 of the 17 traders who
took part in the survey picked a tapering of QE as the most
likely next policy step.
Four said the central bank would reverse course and increase
monthly purchases. Two said the ECB would raise interest rates
next while none picked a further cut in interest rates.
At its last policy meeting in December, the central bank
extended the bond buying scheme to the end of 2017 and held its
main refinancing rate at zero and its deposit rate at -0.4
Since then - and following December's spike in inflation - some
economists and policymakers, notably in Germany, have urged the
ECB to raise rates.
A wider Reuters poll of 19 traders found the ECB would allot 33
billion euros ($34.7 billion) to banks at its weekly refinancing
operation, slightly less than the 34 billion euros maturing from
Forecasts ranged from 25 billion to 40 billion euros.
(Reporting by Purnita Deb; Polling by Kailash Bathija; editing
by Jonathan Cable and John Stonestreet)
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