ECB reiterates necessity of flexible monetary policy

European Central Bank (ECB) president Mario Draghi reiterated Thursday that "a very substantial degree of monetary accommodation" is still needed to support the euro area to move towards "a sustained convergence of inflation rates to levels below, but close to two percent over the medium term."

The underlying inflation remains low but shows convincing signs of a pick-up, Draghi said at a press conference, reminding that it is conditional on monetary policy, as the inflation in the euro area at current stage is not where "we want it to be or it should be."

In the meantime, the governing council of the ECB is unanimous in keeping the forward guidance unchanged as well as in not setting a precise date for adjusting current monetary stimulus for the euro area.

The bank decided Thursday to keep key interest rates for the euro area at record lows. Asset purchases at the current monthly pace of 60 billion euros (69.39 billion U.S. dollars) will continue until the end of December 2017, or beyond if necessary.

Regarding forward guidance, the ECB said in its statement that it still expects key interest rates to remain at their present levels for an extended period of time, insisting that if the outlook becomes less favorable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the ECB stands ready to increase the program in terms of size and/or duration.