The European Central Bank's monetary policy stance will help to achieve medium term price stability in the euro zone, ECB President Jean-Claude Trichet said this afternoon.
Jean-Claude Trichet, President of the European Central Bank
Earlier the ECB left interest rates at 4 per cent for the ninth month running, and analysts said Mr Trichet's comments marked a small step towards the Governing Council adopting a bias to ease monetary policy.
"We had absolutely no call for either decreasing rates or increasing rates, we were unanimous," Mr Trichet told a news conference after the Governing Council's monthly policy meeting.
"We believe that the current monetary policy steps will . . . achieve our objective of medium term price stability and solid anchoring of inflation expectations."
So far the ECB has refused to join the central banks of the United States, Britain and Canada in cutting interest rates, putting its worries about euro zone inflation above those of weakening economic growth.
Annual inflation in the 15-nation region hit a record high of 3.2 per cent in January and February, well above the ECB's target of keeping the rate below, but close to 2 per cent.
"The economic fundamentals of the euro zone are sound, incoming macro economic data point to moderating but ongoing real GDP growth, yet the level of uncertainty resulting from the turmoil in financial markets remains high," said Mr Trichet.
"Against this background we emphasise that maintaining price stability in the medium term is our primary objective in accordance with our mandate. The firm anchoring of medium- to long-term inflation expectations is of the highest priority to the Governing Council," he said.