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ECB lending meets estimates; euro steady

ECB loan take-up meets expectations

The uptake of a low-rate loan program by the European Central Bank (ECB) met market expectations on Thursday, amid calls for the central bank to do more to help kick start the region's economy.

The second allotment of the targeted long-term refinancing operation (TLTRO) came in at 129.84 billion euros ($162 billion), according to the bank, narrowly missing analysts' median expectations of 130 billion euros, in a Reuters poll.

LTROs are cheap loans provided to euro zone banks and have been implemented by the ECB alongside the purchases of covered bonds and asset backed securities.

The uptake of the loans has been less than the ECB originally hoped for when the scheme was first announced. Along with the first round of lending, the total take up comes to 212.4 billion euros - significantly short of the 400 billion euros on offer this year.

However, it managed to beat many gloomier predictions, and analysts disagreed on what impact this might have on the potential for a full sovereign bond-buying program by the ECB.

Read MoreDraghi's finger on trigger: Where next for euro?

Yields on long term sovereign debt of nations like Portugal and Italy trimmed losses, after initially falling lower on the news. The euro fell to a session low of 1.2416 against the dollar but quickly regained ground and was relatively unchanged despite the new data by 11 a.m. GMT.

Boris Schlossberg, managing director of FX strategy at BK Asset Management, told CNBC Thursday that the news was "euro positive."

It indicates that there may be a delay to any quantitative easing (QE) program, according to Schlossberg. He added that traders were expecting the euro to fall over the coming months, so there was room for the single currency to see slight rallies.

'Not good enough'

European Central Bank Governor Mario Draghi speaks at a news conference during the World Bank/IMF annual meetings in Washington, Oct. 11, 2014.
Joshua Roberts | Reuters

Naeem Aslam, chief market analyst at brokerage firm Avatrade, said the results were "not good enough" and that the ECB would now have to now look at additional stimulus measures.

Read MoreECB would have cut rates at last meeting: Praet

"The results of this has made the job a lot more easier for (ECB President Mario Draghi), who has mentioned several times about adding the corporate bonds and sovereign bonds to their shopping list," he said in a research note.

"After these results he will have to face less resistance from opposition such as Germany."

The loan program has its critics, such as Markus Schomer, the chief economist at PineBridge Investments. He told CNBC Thursday that it was "ill-designed" and he expected it to be a "huge failure".

When will the ECB pull the trigger on full QE?

"The problem is how can you offer liquidity to the banks when you charge them for holding that liquidity with the central bank," he said regarding the negative deposit rate the ECB has issued alongside its credit easing measures. "I think that negates any effect that the TLTRO can have."

Read MoreECB considering QE package for next month: Source

After fragile signs of a recovery last year, the euro zone bloc has suffered from subdued inflation in 2014, with the specter of deflation looming, and gross domestic product (GDP) figures that have seen Italy fall back into recession and Germany post negative growth. A second reading of inflation data on Thursday showed that France's November figure was worse than its initial estimate with a monthly drop of 0.2 percent.