Excess euro zone liquidity seen near current levels at quarter-one end

BANGALORE (Reuters) - Excess liquidity in the euro zone will be near current levels at the end of this quarter as banks slow repayments of their crisis loans, according to a firm majority of traders in a Reuters poll.

The ECB pumped over a trillion euros into banks' coffers in two long-term refinancing operations (LTROs in December 2011 and February 2012) to ride out funding constraints.

Since January last year, banks have repaid almost half of those loans and that has pushed excess liquidity - cash beyond what lenders need to cover their day-to-day operations - to levels seen before those twin ECB operations.

But 17 of 23 euro money market traders polled expect the pace of repayments of the crisis loans to ease, keeping excess liquidity around its current level of 144 billion euros at the end of next month.

One trader expected it to rise while the remaining five traders expect it to fall.

"LTRO repayment will slow down from now as euro banks are under stress and the amount which was easy to pay back has already been done," said a trader.

Banks are nevertheless expected to repay 2 billion euros (1.6 billion pounds) of the crisis loans next week, slightly more than the 1.8 billion euros they will return this week.

The regular poll showed the ECB is expected to allot 100 billion euros at its weekly refinancing tender and 7.5 billion euros at its one-month tender.

Previously 95.146 billion euros was allotted at the weekly auction and 7.092 billion euros at the one-month tender.

(Polling by Ishaan Gera and Sarbani Haldar; Reporting by Rahul Karunakar and Ashrith Doddi Editing by Jeremy Gaunt)