The European Central Bank (ECB) left its benchmark interest rate unchanged on Thursday and said it would continue with its generous asset-buying program until at least the end of the year.
The ECB stuck to the same rate of asset purchases announced in January with the monthly rate due to come down from 80 billion euros ($84.4 billion) to 60 billion euros in April and is set to run through until the end of December this year.
ECB President Mario Draghi declared that a very substantial degree of stimulus was still required for the euro zone on the day which marked the two-year anniversary since the central bank introduced quantitative easing (QE).
Draghi also said the ECB would continue to look through "transient" changes in headline inflation figures. Typically, the central bank chief has vowed in his introductory statements that the ECB is prepared to use "all the instruments available within its mandate" however this had been removed on Thursday.
"That's been removed, basically to signal that there is no longer that sense of urgency in taking further actions ... that was prompted by the risks of deflation," Draghi explained.
As a consequence, German 10-year bond yields spiked to hit a one-month high of 0.43 percent and the euro hit session high of $1.0605.
"Underlying inflation pressures continue to remain subdued, the Governing Council will continue to look through changes in HICP (Harmonized Index of Consumer Prices) inflation if judged to be transient and to have no implication for the medium-term outlook for price stability," Draghi told reporters at a press conference Thursday.
"A very substantial degree of monetary accommodation is still needed for underlying inflation pressures to build up and support headline inflation in the medium term," he added.