European Central Bank (ECB) President Mario Draghi reiterated on Monday his commitment to low interest rates, saying higher rates were not currently warranted.
Speaking to the European Parliament's Economic and Monetary Affairs Committee, Draghi said: "The situation, as far as price stability is concerned, and the economic situation in large parts of the world is concerned, is that higher interest rates would not be warranted at this point in time."
He said the ECB had "sharpened its communication" in giving forward policy guidance for the first time last week, when Draghi said interest rates would remain at present or lower levels for an extended period of time. The announcement shocked markets and sent the euro falling against the dollar.
When asked whether the statement itself would suffice, or further policy action was needed, he said: "The intention was really to announce a monetary stance which will keep the interest rates to remain at the present or lower levels for an extended period of time. Then we'll have to see what the market reaction has been, is and will be to this statement."
On Monday, Draghi conceded that raising interest rates could produce some benefits. "Of course, higher interest rates would reduce risk on the one hand," he said, but added: "On the other hand, higher interest rates in a weak economic situation would destabilize a country, making the life of your counter-parties even more difficult."
(Read More: Euro Slides as Draghi Commits to Low Rates)