After the European Central Bank decided to leave interest rates unchanged at 1.50% in the press conference following the decision President Trichet said the monetary policy remains accommodative and the downside pressures have somewhat intensified.
Trichet said that the monetary policy remains accommodative and the outlook for inflation remains to the upside. The euro area economy will continue to expand moderately but the global downside pressure might spill into the euro area and the financial market tension remains main downside pressure.
To counter the tension in markets from intensifying the downside pressure, the ECB decided to continue the refinancing operations and hold six month tenders and assured that the bond buying program is ongoing and the measures are independent.
The bank will provide the unlimited liquidity to banks and extended the REFI operations till the end of the year to ease the tension and calm investors over the crisis seen in the market.
On the fiscal policy, Trichet reiterated his call on nations for fiscal responsibility and to conduct the measures needed to ensure stability.