ECB monthly bulletin showed that ECB members decided to preserve the benchmark interest rates at 1.00 percent, believing that the rates are appropriate despite inflation warrants very close monitoring.

Risks to the medium-term outlook for price developments are still broadly balanced but could move to the upside, the bulletin said.

The bulletin repeated Trichet's remarks on inflation which was made during the rate decision press conference. The Governing Council sees evidence of short-term upward pressure on overall inflation, mainly owing to energy prices, but this has not so far affected its assessment that price developments will remain in line with price stability over the policy-relevant horizon, adding that At the same time, very close monitoring is warranted.

Inflation accelerated in December above the 2.0 percent desired rate by the ECB, where it reached 2.2 percent.

Growth outlook of the region is still tilted to the downside, with uncertainty prevailing, where the bank expects growth rate to slow this year to 1.4%, compared with 1.7 percent in 2010.