European Central Bank President Mario Draghi said on Thursday that the economic recovery in the euro area is uneven and cautioned that the crisis in Ukraine could hurt growth in the region.
"Inflation expectations for the euro area over the medium to long term continue to be firmly anchored in line with our aim of maintaining inflation rates below, but close to, 2 percent," Draghi said in his introductory remarks at the customary post-meeting press conference in Frankfurt.
"The monetary policy measures decided in early June have led to an easing of the monetary policy stance."
The ECB expects the targeted longer-term refinancing operations, or TLTROs, announced in June and scheduled to take place over the coming months to enhance the accommodative monetary policy stance.
"This should help to ease funding conditions further and stimulate credit provision to the real economy," Draghi said.
The central bank has accelerated the initial steps for outright purchases in the asset-backed securities market to enhance the functioning of the monetary policy transmission mechanism, he reiterated.
"The key ECB interest rates will remain at present levels for an extended period of time in view of the current outlook for inflation," Draghi said.
"The Governing Council is unanimous in its commitment to also using unconventional instruments within its mandate, should it become necessary to further address risks of too prolonged a period of low inflation. We are strongly determined to safeguard the firm anchoring of inflation expectations over the medium to long term."
Acknowledging downside risks to the Eurozone growth outlook, Draghi said increased "geopolitical risks" and "developments in emerging market economies and global financial markets", could impact "economic conditions negatively, including through effects on energy prices and global demand for euro area products".
Insufficient structural reforms in euro area countries and weaker than expected domestic demand are also risks, the central bank chief added. Risks to the inflation outlook are broadly balanced, he said.
"In this context, we will closely monitor the possible repercussions of heightened geopolitical risks and exchange rate developments," Draghi said.
Responding to reporters' questions, Draghi said the crisis in Ukraine will have a greater impact on the euro area than anywhere else. However, he said, it was very hard to assess what the actual impact of these geopolitical developments would be once sanctions and counter-sanctions play out.
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