The European Central Bank should not wait too long to take action to spur growth and inflation, a senior ECB policymaker has said.
Ewald Nowotny, a member of the ECB's Governing Council, added that steps including bond buying were still being discussed.
"I don't think that one should get into monthly data but I think we certainly have prospects for very low inflation rates in the medium term," Mr Nowotny stated.
The ECB is considering a hybrid approach that would see it buy government bonds with risk-sharing across the euro zone and, in a nod to German qualms, separate purchases by national central banks.
It may announce a sovereign bond buying programme as early as January 22 and will certainly have done so by March, according to all but one of 20 euro money market traders polled by Reuters.
Asked if the ECB would unveil a €500 billion plan next week, Nowotny said he could not answer simply "because we have a lot of things in motion and I think it would not be right to go into great detail now".
But he said doing nothing would let the ECB's balance sheet contract as banks repay cheap loans from the central bank, which would have a restrictive impact to be avoided.
Nowotny said it was easier for a central bank to combat inflation than deflation, a sustained fall in prices that may prompt consumers to hold off on purchases in expectations that prices will fall even more.
"We have a danger of inflation but I would not say that we are in deflation," he said after euro zone inflation turned negative in December for the first time since 2009.
"I think we may see that several times in the first quarter but I don't think we will see negative inflation rates over the course of a year, so this is not deflation in the classic sense," he added.
