(Reuters) - The European Central Bank won't cut its main refinancing rate this week, euro money market traders said in a Reuters poll, even though inflation in the bloc has fallen to its lowest level in almost four years.

(Reuters) - The European Central Bank won't cut its main refinancing rate this week, euro money market traders said in a Reuters poll, even though inflation in the bloc has fallen to its lowest level in almost four years.

Although a sharp moderation in the headline flash inflation figures released last week raised speculation of a rate cut, all but one of the 23 traders polled by Reuters expect the ECB to remain on hold when they meet on Thursday.

"They will save the last ammunition and will want to see if we really have weaker figures in the future," one euro money market trader said.

However, traders say falling liquidity in the currency bloc is more of a concern.

Indeed, excess liquidity, cash beyond what lenders need to cover day-to-day operations, was around 175 billion euros on Monday, levels last seen in late 2011 before the twin long-term refinancing operations (LTROs) from the ECB of over one trillion euros.

A separate Reuters poll last month showed the central bank is all set to flush money markets again with their long term cheap loans early next year. <ECB/INT>

Even Governing Council member Ewald Nowotny told CIBC last week that the central bank would provide more liquidity by the time cheap long-term loans it made in late 2011 and early 2012 expire.

Excess liquidity has taken a hit since January when banks had the first opportunity to repay those loans early and have returned over a third so far.

The poll showed banks will repay 2.5 billion euros ($3.4 billion) of the first three-year crisis loans and the same of the second next week. That is less than half the combined 10.65 billion euros they will return this week.

The regular survey of 25 traders showed the ECB is expected to allot 90 billion euros at its weekly refinancing operation, similar to the 89.3 billion euros maturing this week.

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($1 = 0.7414 euros)

(Reporting by Ashrith Doddi; Polling by Sarmista Sen; Editing by Toby Chopra)