FRANKFURT Jan 9 The European Central Bank
expects inflation to remain low for some time but then to move
back up towards the bank's target, its president, Mario Draghi,
said on Thursday.
He said the expectation for the medium to long term was for
inflation to remain "anchored" to the ECB's close-to-but-below 2
Draghi also said there was no change to the ECB's view of
how monetary policy would proceed.
"We firmly reiterate our forward guidance and we continue to
expect that key ECB interest rates will remain at present or
lower levels for an extended period of time," he said at a news
conference after the ECB kept its main interest rate at a record
low of 0.25 percent.
Euro zone inflation has undershot the ECB's target of just
below 2 percent for several months and stood at 0.8 percent in
December, sparking concern the euro zone could go down a similar
route as Japan in the 1990s and enter a deflationary scenario.
Draghi said last week there were no signs of deflation or an
urgent need for another rate cut, but added that it was vital to
avoid a scenario where inflation gets stuck permanently below
one percent and slips into a danger zone for the economy.