The European Central Bank is becoming more confident that inflation will rise back to its target but the euro zone still requires substantial stimulus, ECB President Mario Draghi said on Monday.

The medium term outlook is also clouded by uncertainty, including from the recent volatility in the euro’s exchange rate, Draghi told the European Parliament’s committee on economic affairs in a speech that is largely consistent with the bank’s September policy statement.

“Overall, we are becoming more confident that inflation will eventually head to levels in line with our inflation aim, but we also know that a very substantial degree of monetary accommodation is still needed for the upward inflation path to materialize,” Draghi said.

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