ECB's Knot says short taper acceptable at end of QE

"It's reasonable for the asset purchase program to come to an end after September, with a short tapering period if needed," Knot said. "Only after that we will turn to other instruments like our policy rates."

The comments suggest that Knot, considered a policy hawk on the ECB's Governing Council, is willing to accept that the program be wound down gradually instead of ending it in a single step.

A tapering period is significant as the ECB ties the timing of the first rate hike to the end of asset buys, so any extension, would push out the timing of the first rate hike.

"Given the current pace of economic expansion I’m confident that in the medium term euro area inflation will return to below but close to 2 percent", Knot said.

(Reporting by Bart Beijer; Writing by Balazs Koranyi; Editing by Francesco Canepa)