ECB takes first step towards exit

Many of these, including lending banks unlimited funds at fixed rates, are only guaranteed to continue "beyond the end of 2009."

He declined to say, however, whether the ECB would bump up the price of funds at next month's 12-month operation from the 1.0 percent rate -- a move which would be taken as confirmation of a likely rate rise before the end of 2010.

In an interview with Reuters Television, Trichet showed no rush to bring forward the expiry date of even the longest-lasting measures, such as accepting lower-quality assets as insurance in its lending operations.

"We will examine the situation permanently but I don't see anything that I could preannounce at the moment," he said of the end 2010 expiry-date on lower collateral standards.

BACKDOOR EXIT

Economists said Trichet's comments backed expectations that the ECB would let other extra liquidity operations expire next year and allow market interest rates to drift back up.

"The ECB will opt for the gentle backdoor exit for its non-standard measures, not for an active withdrawal of liquidity, by not extending these 12-months operations in December," ING economist Carsten Brzeski said.

"By simply not extending these measures, the ECB will gently drain liquidity and money market rates should move towards the refi again."

Trichet gave no sign of any rush to drain funds, saying the ECB did not aim to bring overnight cash rates back to the main policy rate in the next period of time.

By next month's meeting, the ECB will have updated staff economic projections and the first forecasts for 2011, the crucial period for today's monetary policy decisions given the long lead time.