The European Central Bank has left interest rates unchanged as the euro's recent rise against the US dollar relieved pressure to counter inflation risks. The ECB's key minimum refinancing rate was held at 3.25 per cent.
The ECB hinted last month that the rate, steady for eight months, might soon be going up. But the recent weakness on Wall Street and the euro's appreciation caused it to rethink.
Earlier this week bank President Mr Wim Duisenberg said the recent rise of the euro "will contribute to easing inflationary pressures," but added that the bank would continue to "closely monitor all relevant developments" that put price stability at risk.
The ECB's governing council met in Luxembourg in one of the two meetings a year it traditionally holds outside of Frankfurt.
The euro, which was trading at 97 U.S. cents just ahead of the bank's announcement, was quoted at 97.7 cents after the rate decision.
Most economists said ahead of the ECB's governing council meeting they believed a hike in interest rates within the eurozone would not be made until September at the earliest.
They cited the euro's gain of around 10 per cent over the past two months to near-parity with the dollar as the main factor allowing the central bank to hold off.
A stronger euro helps reduce inflation in the 12 European Union countries that use the currency by making imports less expensive, especially crucial commodities like oil.