The European Central Bank held interest rates steady again but said slowing inflation could open the door to monetary easing, raising hopes of a first cut in June.
The central bank froze borrowing costs for the fifth time, with the key deposit rate at a record high of 4 percent.
The ECB has been raising interest rates at a record pace to tame a hot run-up in prices, but there have been increasing calls to start cuts as inflation falls and higher borrowing costs weigh on the single currency area.
Eurozone inflation slowed more than expected in March to 2.4% - not far from the ECB's 2% target.
A slowdown in inflation was thought unlikely as officials repeatedly stressed they were waiting for more data, which would only be available for their June meeting.
However, in its statement, the central bank changed its wording, saying that most measures of underlying inflation were falling and wage growth - particularly worrying in recent months - was "slowing".
"Previous interest rate hikes continue to have an impact on demand, helping to lower inflation," it said, while adding that domestic price pressures were still a cause for concern.
If the ECB's confidence increases "that inflation is durably close to target, it would be appropriate to reduce the current level of monetary policy accommodation", she said.
The central bank insisted that its decisions would continue to be based on incoming data and that it was "not committing in advance to a specific interest rate trajectory", but many analysts nevertheless expect a first cut in June.
"There is no policy action, but the ECB is officially opening the door to a June rate cut," Capital Economics analysts said. / BGNES
