Banks to return 11.4 billion euro of crisis loans to ECB next week
Reuters) - Banks will return 11.401 billion euros ($15.78 billion) in crisis loans to the European Central Bank next week, more than six times than the amount that was expected, accelerating the drain of extra cash out of the euro zone financial system.
The amount banks will repay on March 12 beat this week's repayments of 3.012 billion euros and is more than the 2.1 billion forecast in a Reuters poll.
It is the largest repayment since the end of last year, when banks returned large chunks of the long-term loans they took from the ECB in late 2011 and early 2012 to ride out a credit crunch.
Many banks used the cheap funds to buy higher-yielding government debt and next week's hefty repayment could be "mainly related to the expiring of some short-dated Italian bonds in early March", Annalisa Piazza, analyst at Newedge Strategy, said.
The euro hit a 2014 high of 1.3892 after the release of the repayment figures.
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