The European Central Bank is ready to take action next month to boost the euro zone economy if price inflation forecasts warrant it, its president said today.
He also cautioned countries against pressuring the bank into action.
"The Governing Council is comfortable with acting next time but before we want to see the staff projections that will come out in early June," Mario Draghi told a news conference afterthe ECB decided to keep its interest rates unchanged at 0.25%.
He also flagged his concerns about the strength of the euro, which hit a two and a half year high against the dollar as he was speaking.
"We have a consensus about action, but after seeing the staff projections in early June," he said.
Draghi repeated the ECB's commitment to keeping monetary policy loose for an extended period of time.
"We will maintain a high degree of monetary accommodation and act swiftly if required with further monetary policy easing," Draghi said, adding that all options had been on the table at the meeting that decided to keep rates unchanged.
But he also took a swipe at institutions and countries that have been calling for the ECB to take more action to boost the economy and counter deflationary pressures.
"We have received plenty of advice," he said. "We are independent, so people should be aware that if this might be seen as a threat to our independence it could cause long-term damage to our credibility."
French politicians, the International Monetary Fund and others have become increasingly vocal about calling for steps to curb the growing strength of the euro. The euro, trading at $1.38 to the dollar, has gained more than 14% over the US dollar since a July 2012 low.
Draghi also said that the bank was on alert to the perils of euro strength. "Strengthening of the exchange rate in the context of low inflation is cause for serious concern in view of the governing council," he said.
"The governing council is unanimous in its commitment to using also unconventional instruments within its mandate."
The ECB Governing Council met in Brussels today instead of its Frankfurt headquarters against the backdrop of a Franco-German spat over ECB policy towards the euro's strength - one factor Draghi has identified as a potential trigger for policy action.
France wants it act now to prevent continued low price inflation while industrially powerful Germany is apprehensive because its fears fresh bubbles - for example, in the cost of housing.
Financial markets have been embracing the euro as the economy has improved and with the debt crisis easing. This is illustrated by the fact that despite a massive default on its debt roughly two years ago, Greece is already able to borrow again, albeit on a small scale.
But the rising demand has pushed the strength of the euro against currencies such as the dollar higher, another factor that could compound the problem of low prices because it makes it cheaper to import.
Germany's finance minister Wolfgang Schaeuble cautioned today against the dangers of easy central-bank money.
"We need to reduce excess liquidity to prevent new (speculative) bubbles from forming," he said.
Germany has said, however, that the level of the euro was a nissue for the ECB but not politicians, indirectly criticising France's prime minister after he said the currency was "too high" and a "more appropriate" monetary policy was needed to bring it down.
Data have since shown euro zone inflation ticked up to 0.7% in April from March's 0.5%, relieving pressure on the ECB to act this month. But a downward revision in the staff inflation forecasts in June could trigger action next month.
The Bank of England also keep UK rates steady at record lows of 0.5% today.