Hungary's central bank cut its base rate for the 13th time in a row, this time by 20 basis points, as the central bank lived up to its word that it would change the pace of its easing in coming months.
The National Bank of Hungary, which has cut rates by 195 basis points this year, did not release any further statements.
To stimulate economic growth, Hungary's central bank embarked on an easing cycle in August last year, cutting rates each month by 25 basis points for a total reduction of 320 basis points.
But last month the bank said it would change the pace or extent of policy easing in light of the significant cuts already executed. The volatile condition in financial markets is also calling fora more cautious approach in policy, the bank said.
Economists had expected the central bank to cut rates again, but by a smaller amount as in the past as Hungary, like other emerging markets, are faced with an outflow of capital as investors prepare for a tapering of asset purchases by the U.S. Federal Reserve.
Last month the bank also said that the rate cuts would help inflation return towards the bank's target of 3.0 percent. Hungary's inflation rate eased to 1.8 percent in July from 1.9 percent in June.
In the second quarter of this year, Hungary's economy expanded by 0.1 percent from the first quarter for annual growth of 0.5 percent, up from a contraction in the previous five quarters.