(Bloomberg) -- Hungary’s central bank is poised to finish its more than yearlong monetary easing cycle with one last interest rate cut, which is likely to err on the side of caution after a plunge in the forint.

The National Bank of Hungary will on Tuesday lower the benchmark rate by a quarter point to 7%, matching Romania’s for the highest key interest level in the European Union, according to 18 out of 22 economists surveyed by Bloomberg. Four economists expect a half-point cut. The central bank will announce its decision at 2 p.m. in Budapest, followed by a statement and briefing two hours later.

The forint’s 2.7% drop against the euro since the last rate cut a month ago is likely to prevent a bolder easing step despite lower-than-expected inflation. Policymakers have progressively slowed the pace of reductions from a full-percentage percentage point in February to just a half-point in April and May. The interest rate peaked at 18% before the start of the easing cycle.

Deputy Governor Barnabas Virag said last month that there remained “very, very limited” room for further cuts, though he stopped short of saying that June would be the last such move this year. Traders meantime still see room for some more easing, according to forward rate agreements.

Key forecasts from the central bank’s updated inflation report, to be published along with the statement on Tuesday, may provide clues about the interest rate path. 

Annual price growth accelerated to 4% in May from 3.7% in April, less than the 4.2% median estimate in a Bloomberg survey. Virag said last month that he didn’t expect disinflation to return until the start of next year. 

Hungary targets 3% inflation in the medium term, with a 1 percentage point tolerance band on either side.

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