Trichet: Have confidence in inflation deceleration

And one day after the ECB's decision to hold key interest rates steady - a decision that surely disappointed some euro-zone finance ministers - Trichet defended the independence of the central bank.

In a radio interview with RTL, Trichet said that the 75 basis points in rate cuts already this year was a way for the ECB to express "our confidence that inflation within the euro zone would fall below 2%." The last time the ECB cut interest rates was 17 September, when it lowered rates by half a point.

The ECB opted Thursday to leave its minimum bid refinancing rate unchanged at 3.75%, although some finance ministers, including France's Laurent Fabius, had called for a rate reduction to boost the euro-zone's growth prospects.

Trichet said that that the ECB "has to make our decisions independently."

Addressing disappointment that the ECB didn't lower rates Thursday, Trichet noted that the executive board meets every two weeks, and people shouldn't expect "a spectacular decision" each time.

Trichet also repeated the mantra of ECB officials that there is no contradiction between low inflation and economic growth, since household confidence that inflation is low is a key factor supporting consumption.

Asked about the value of the euro, which has fallen back below $0.90 against the dollar in recent days, Trichet said the currency is undervalued and that a strong euro is in the interests of Europe.

"I'm fully convinced that the reappreciation of the euro will occur in a very clear way," Trichet said.

Asked about the dangers of more lax budget policies, Trichet said he's confident that French and German governments, as well as other euro-zone countries, will continue to adhere to the Stability and Growth Pact under which governments aim for balanced budgets over the medium term.