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RTRS:Banks to repay 3.08 billion euros of ECB crisis loans
 
(Reuters) - Banks will return 3.081 billion euros of crisis loans ahead of time to the European Central Bank next week, after policymakers at the bank said its monetary stance would stay expansive.

The ECB cut its main refinancing rate to a record low of 0.5 percent in May and President Mario Draghi said it was ready to cut borrowing costs further if the economy deteriorated, including the deposit rate now at zero. That would mean charging banks to hold their money overnight.

ECB Governing Council member Ewald Nowotny told Reuters earlier this week the bank was prepared to keep rates low for "as long as needed".
Recent economic data has been mixed. On Friday, data showed euro zone unemployment reaching a new high at 12.2 percent in April, while annual inflation rose to 1.4 percent in May from 1.2 percent in April.

The ECB had also decided at its May meeting to extend its provision of unlimited funds to banks, saying it would prime them with as much as they need until at least July 2014. This gives banks more funding assurance.

Banks took over 1 trillion euros of three-year loans from the ECB in two long-term refinancing operations (LTROs) in December 2011 and February 2012, of which the first matures in January 2015.

They now have the option to repay the loans early and have returned almost a quarter already.

On Friday, the ECB said six banks would repay 2.810 billion euros from the first LTRO on June 5 and six would repay 271 million euros from the second.

A Reuters poll of euro money market traders had expected banks to return 4 billion euros next week.

Source