ECB won’t cut negative deposit rate further in coming nine months: traders

The head quarter of the European Central Bank (ECB) is illuminated with a giant euro sign at the start of the "Luminale, light and building" event in Frankfurt

BENGALURU (Reuters) – The European Central Bank won’t cut its already negative deposit rate any further over the coming months, according to a majority of euro money market traders polled by Reuters on Monday.

Financial markets went into a frenzy on Friday and global stock markets lost about $2 trillion in value after Britain voted to leave the European Union. That sparked expectations for a new round of emergency policy easing from major central banks.

But 11 of 19 traders said the ECB would not cut the deposit rate from it’s current -0.40 percent in the next nine months.

Two traders expect a 10 basis point cut to the deposit rate in the next three months and the remaining six traders expect a cut in the next six months.

The regular survey of 20 traders showed the ECB would allot 10 billion euros at its 3-month tender and 55 billion euros at its weekly refinancing operation.

That compared to 10.25 billion euros maturing this week from the previous three-month operation and 49.88 billion euros from the prior seven-day tender.

(Reporting by Rahul Karunakar; Polling by Shrutee Sarkar)