The European Central Bank today stuck to its wait-and-see stance on interest rates, saying inflationary risks have not entirely vanished in the euro zone despite slower growth.
The bank, the only major central bank to have rejected calls for a rate cut in the face of US-led global downturn in growth, also said keeping inflation low was the best way to boost and maintain confidence in the European single currency.
"Anchoring confidence in the euro, in particular for the general public, is a time-consuming task," ECB president Mr Wim Duisenberg said in a foreword to the bank's annual report.
"The best way in which to achieve it is to build a track record of low inflation," he said.
Mr Duisenberg said: "Since the last increase of ECB interest rates in October 2000, risks to price stability in the euro area have become more balanced. However, they have not entirely disappeared."