Although there are some early signs of rebound in the consumer price pressures, it should be treated with caution, said Klaas Knot, member of the board of governors of the European Central Bank.

“We really see the first signs that core inflation is rising very, very, very slowly, but it is too early to be optimistic about this”, Knot said during a panel discussion at the World Economic Forum in Davos, Switzerland.

The ECB did not change its policy on Thursday and reiterated its promise to keep rates at the record low or even lower, as well as continue to buy bonds in the amount of 20 billion euros per month until inflation in the eurozone begins to return to the target at or slightly below 2%.

The ECB could take the deposit rate even further into negative territory, but each new reduction will have less impact on the economy (because of growing signs of liquidity trap) and because of various side effects, Knot said in an interview with CNBC.

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