The European Central Bank said on Thursday it was following unfolding events in Ukraine after the launch of a Russian invasion and watching for any impacts on the eurozone economy.

"The ECB is closely monitoring the implications of the situation in Ukraine," the central bank said in a statement.

"It will conduct a comprehensive assessment of the economic outlook at the March meeting" of its policy-setting governing council, including "the recent developments in the geopolitical area", the ECB said.

Sanctions are "decided by the EU and the European governments" and "the Eurosystem will implement them", it said.

The Frankfurt-based institution was already monitoring the risk posed to financial markets in Europe by rising tensions surrounding Ukraine.

This included looking at what consequences further sanctions or the fallout from a wider invasion of Ukraine could have on banks' liquidity, loan books and their ability to keep operations running, according to a Bloomberg report Wednesday.

The ECB is currently executing a "step-by-step" reduction in its bond-buying programme, the main crisis-fighting tool it has used through the coronavirus pandemic.

Recently, it has come under pressure to accelerate the moves and bring forward the prospect of interest rate hikes as inflation in the eurozone has shot well above the banks two-percent target, hitting 5.1 percent in January.

The record pace has been driven in no small part by soaring prices for energy, sent up by rising tensions between the West and Russia, a major supplier to Europe.

The escalating situation in Ukraine would "not only have implications for oil and gas prices, but also for investor confidence, consumer confidence, trade", the ECB's chief economist Philip Lane told the German daily FAZ in an interview published on Wednesday.