The European Central Bank will not begin outright quantitative easing (QE) this year, most euro money-market traders polled by Reuters said on Monday.
80% money-market traders said they do not expect an ECB asset-purchase programme to start this year, because the ECB is banned from buying government bonds and assets outright.
"Even if the ECB wants to, it will not be allowed to do so," said a trader at a large dealer.
But the remaining five respondents in the poll said the central bank would undertake QE by ending its sterilisation operations under the Securities Markets Programme (SMP).
The liquidity provided through the SMP is now absorbed by weekly collections of fixed-term deposits - called sterilisation.
Banks have repaid more than half of the over 1 trillion euros in crisis loans made since January of last year. As a result, excess liquidity in the currency bloc has fallen to the lowest level since December 2011.
Economists are divided over whether the Frankfurt-based ECB will increase stimulus to counter the risk of deflation after euro-area inflation slowed to 0.7 percent in January, less than half the bank’s 2 percent target.
Draghi said the council will have “the full set of information needed for deciding whether to act or not” by its next policy meeting on March 6 in Frankfurt, when it will publish a 2016 inflation projection for the first time.
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