FXstreet.com (Barcelona) - Today's monetary policy decision to raise interest rates to 4.25% has been taken in order to prevent second round effects to price stability over the medium term, affirmed Trichet who has not given any hint over next interest rate moves as he reaffirmed the Bank's commitment to anchor price stability over the medium term.

Trichet, who did not want to precommit on any future rate moves, has affirmed that the Bank's primary objective is to maintain price stability over the medium term, and, therefore, the Bank will do whatever is needed to keep medium term inflation in line with price stability in order to preserve purchasing power in the medium term and continue to support sustainable growth and employment in the euro area.

The Bank's president observed that inflation has been growing at a fast pace since last autumn, while he warned that prices will continue growing at a fast pace for a more protracted period than previously thought, besides, very vigorous money and credit growth, plus the absence of significant constraints on bank loan supply in a context of ongoing financial market tensions confirms, according to Trichet, that risks to price stability are on the umside, over the medium term.

Furthermore, after assuring that the Euro Area is based upon solid fundamentals, he warned about a considerable slowdown of the area's GDP growth in the second quarter of the year, which will offset an exceptionally strong growth in the first quarter.