The European Central Bank (ECB) on Wednesday kept its key interest rates unchanged and said an exit strategy for the non-standard measures to tackle the debt crisis is premature.

The ECB made the decision based on regular economic and monetary analysis and the information since the beginning of March broadly confirms the previous assessment of the ECB, ECB President Mario Draghi said in an introductory statement.

Inflation rates are likely to stay above 2 percent in 2012, with upside risks prevailing. Over the policy-relevant horizon, price developments are expected to remain in line with price stability, Draghi said. Consistent with this picture, the underlying pace of monetary expansion remains subdued, he said.

Draghi said the measures taken by the ECB have contributed to the stabilization in the financial environment and an improvement in the transmission of the monetary policy. "We need to carefully monitor further developments," he said.

"It is also important to keep in mind that all our non-standard monetary policy measures are temporary in nature and that all the necessary tools are available to address upside risks to medium-term price stability in a firm and timely manner," said the ECB president.

There is a clear purpose of allaying inflationary risks after the ECB injected more than 1 trillion euros (1.3 trillion U.S. dollars) to the financial markets in two operations since December.

He repeated that the first operation of Longer-term Refinancing Operation, which was conducted by the bank in December with loans over 489 billion euros, had helped averted a major credit crunch.

The ECB still needs to assess the effect of the second three-year loan, which was only settled at the beginning of March, said Draghi.

He pointed out that the real GDP contracted by 0.3 percent in the euro area in the fourth quarter of 2011 and survey data confirmed a stabilization in economic activity at a low level in early 2012.

"We continue to expect the euro area economy to recover gradually in the course of the year," he said.

Draghi said the confidence for a recovery mainly comes from two elements, namely the foreign demand, especially from emerging markets, and low short-term interest rates.

Christian Schulz, a senior economist with Berenberg Bank, said Draghi sounded slightly more hawkish with regard to inflation possibly under pressure from the German central bank Bundesbank.

"A further rate cut looks even less likely at the moment," Schulz said, "The next interest rate step is likely to be a hike, which we expect in March 2013."

The ECB has not bought any government bonds for three weeks. Draghi said at the press conference after the governing council's meeting that the ECB was reviewing the appropriateness of the Securities Market Program (SMP).

"However, closing the SMP would void the ECB of its only direct tool to nip market panics in the bud," said Schulz. (1 euro = 1.31 U.S. dollars)