(Bloomberg) -- Hungarian consumer price increases quickened in May as the country’s central bank edges closer to ending its rate cuts which have lasted for more than a year.  

The annual inflation rate rose to 4% after 3.7% in April, the Budapest-based statistics office said in a statement on Monday. That compares to a 4.2% median expectation of economists polled by Bloomberg with estimates ranging between 3.7% and 4.6%. Month on month, prices fell 0.1%.

The second back-to-back increase of the inflation rate heralds the end of Hungary’s rate-cut cycle that started last May from an effective rate of 18%. That’s expected to be reduced to 6.75-7% at the central bank’s June meeting from the current 7.25%.

That is where cuts may be paused, as the central bank sees “very, very limited room” for further easing after June, according to Deputy Governor Barnabas Virag. The central bank aims to maintain a distance between its interest rate and the level of inflation in order to protect the country’s currency.

The forint was gaining against the euro for most of May, which together with a 4.4% month-on-month drop in fuel prices probably helped restrain inflation. The currency is still down 2.1% so far this year.

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