FRANKFURT, Sept 3 (Reuters) - The European Central Bank will offer banks unlimited 12-month funds at a flat interest rate of 1.0 percent at an operation later this month, its head said on Thursday, offering no sign of easing up on its unconventional measures to support the economy.
The ECB had earlier said it would conduct three 12-month tenders this year at fixed rate and full allotment. The first was held in late June at the main refinancing rate of 1.0 percent and flooded markets with a record of 442 billion euros, which they are still digesting.
The ECB had said the other two, scheduled for September and December, could be at a higher rate. But ECB President Jean-Claude Trichet said the bank would issue the funds at its current main rate of 1 percent.
"This decision (...) should promote the extension of credit to the euro area economy and therefore further underpin its economy," Trichet told a news conference.
The decision met economists' expectations -- of 61 analysts in a Reuters poll last week, 52 had expected the ECB not to add a margin to the September tender, to be held on Sept. 29-30, while 9 said it would. [ECB/INT]
The ECB held its main refinancing rate at 1 percent on Thursday. (London Treasury Desk, patrick.graham@thomsonreuters.com; +44 207 542 4441)