UPDATE: 10:20 a.m. EDT — European Central Bank President Mario Draghi brushed off German criticism of his ultra-loose monetary policy on Thursday and vowed to use all the tools at his disposal for "as long as needed."
He said the ECB's policy was working, which helped boost the euro.
In a staunch defense of the bank's independence from political interference, Draghi also stepped up his calls on euro zone governments to help get the region's economy on a more solid footing through fiscal policy and more ambitious reforms.
Speaking to reporters after the bank's governing council as expected kept key rates on hold and refrained from further stimulus moves, Draghi said the independence of the Frankfurt-based ECB was anchored in the EU treaty.
"We have a mandate to pursue price stability for the whole of the euro zone not only for Germany," he told a news conference.
"We obey the law, not the politicians, because we are independent as stated by the law."
The comments came after German Finance Minister Wolfgang Schaeuble sharply attacked ECB policies, arguing they were causing "extraordinary" problems for Germany and were in part to blame for the rise of the right-wing anti-immigration Alternative for Germany (AfD).
Draghi repeatedly stressed that inflation remained far off the bank's target of near two percent and argued that the euro zone economy still faced a cocktail of external risks and would be in a worse state today had the ECB not resorted to negative interest rates to accompany a 1.7 trillion euro ($1.92 trillion) money-printing scheme.
"Our policies work, they are effective. Just give them time to fully display their effects," he said. "Global uncertainties persist. Looking forward, it is essential to preserve an appropriate degree of monetary accommodation as long as needed."
He said the bank would begin buying corporate bonds as part of its quantitative easing policy in June.
Acting to halt speculation that he was entertaining the prospect of so-called "helicopter money" -- handing money directly to the public -- to kickstart the economy, Draghi stated the bank had not discussed that option.
Whereas in March he suggested there might not be further rate cuts, this time he said they expected "to remain at present or lower levels for an extended period of time."
But he noted that such policies were needed so that interest rates could one day return to a higher level.
Earlier the ECB announced it would keep its main refinancing operations rate -- setting the price for banks to borrow -- at zero while it will continue to charge them 0.4 percent for parking money at the ECB.
Central banks worldwide have been keeping money cheap. Sweden's central bank expanded its asset-buying scheme on Thursday, despite the fact that its economy is in danger of overheating.
Despite a rally in oil prices, long-term inflation prospects have barely improved. The euro zone five-year, five-year breakeven rate, a key market-based expectation that predicts long-term inflation, dipped to 1.39 percent on Wednesday, well below the 1.49 percent when the ECB announced its March package.
The European Central Bank left interest rates unchanged as expected Thursday, holding them at record lows as it prints money in an attempt to lift the economy and raise inflation in the eurozone.
The decision to leave rates on hold was expected by all 60 analysts polled by Reuters after the ECB cut its deposit rate deeper into negative territory last month as inflation prospects went further south.
Investor interest is focused on ECB President Mario Draghi’s press conference. Investors have expressed some doubt about the efficacy of the central bank’s measures in raising inflation.
Draghi is expected to provide more details about some of the measures the bank has already announced, but not yet implemented.
The press conference will be watched particularly closely in Sweden. Earlier Thursday, the Riksbank announced further easing. The Swedish crown moved to its highest level against the euro since March 2015 after the country’s central bank kept its key interest rate unchanged at -0.5 percent, as expected, and extended its bond purchase program.
At its own meeting Thursday, the ECB kept its rate on bank overnight deposits, generally seen as its primary interest rate tool, at -0.40 percent.
The main refinancing rate, determining the cost of credit in the economy, was left at zero percent, while the rate on the marginal lending facility — or emergency overnight borrowing rate for banks — was unchanged at 0.25 percent.
Data from Reuters were used to report this story.