ECB houdt vast aan laag rentetarief (en)
The European Central Bank held interest rates at their present level of one percent on Thursday (8 October), following a meeting of the bank's governing council in Venice.
"The current rates remain appropriate," said ECB president Jean-Claude Trichet at a press conference after the meeting, indicating a rise in interest rates - currently at an historic low - would be unlikely before well into next year.
With consumer prices 0.3 percent lower in September than a year before, the ECB is well below its target inflation rate of "close to, but below" two percent.
However, concerns over the euro's strength against the dollar also appear to have factored into the ECB's decision to keep interest rates on hold.
The single currency for the 16-member area has surged 18 percent against the dollar since February, eroding export returns as Europe struggles to exit its worst recession since the second world war.
"Excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability," said Mr Trichet.
European policy-makers, including economy commissioner Joaquin Almunia, have all hinted at their desire for a stronger dollar in recent weeks.
Mr Trichet also talked of the "increasingly pressing" need for governments to implement "ambitious and realistic fiscal exit and consolidation strategies" - suggesting the ECB is concerned that exit strategies will be implemented too late.
Separately on Thursday, the Bank of England also held its interest rate unchanged at 0.5 percent, while the European Commission chided a number of banks for announcing to markets the early repayment of debt.
"Banks which are currently undergoing restructuring aid investment ...need to verify with the commission before announcing the early repayment of debt instruments," said Jonathan Todd, the EU competition spokesman.
In a statement, the commission said early repayment of loans raised questions as to whether government intervention had been limited to the minimum necessary.
The remarks appear destined for continental banks Dexia and ING, who between them have recently announced over €1 billion in repayments.