(Bloomberg) — Inflation in Hungary accelerated less than expected in October, although a weak currency will limit the central bank’s ability to cut interest rates further.

Consumer prices rose 3.2 percent annually after slowing to the 3 percent target set by policymakers in September, the Budapest statistics office said in a statement on Tuesday. That was lower than the median estimate of 3.5 percent in a Bloomberg survey. Month-on-month, prices rose 0.1%.

While a steady acceleration in price growth was in line with the central bank’s projections, a potentially slower pace could raise hopes that inflation will not rebound as much as policymakers have forecast. The latest projection from the National Bank of Hungary expected inflation to exceed 4% by the end of the year as the underlying effects of last year’s price hike fade.

Apart from inflation, the forint is the more immediate concern of rate-setters. The weak exchange rate has already forced policymakers to scrap plans for monetary easing, even with the economy mired in recession.

The currency has fallen 3 percent against the euro since early October, the second-worst performer among 23 emerging market currencies after the Chilean peso. On Monday, in another day of volatile trading, it fell nearly 0.9% to over 410 per euro, near a two-year low.

The weak currency – which policymakers said was having a bigger negative impact on inflation than in the past – had already prompted the central bank’s deputy governor, Barnabas Virag, to signal a “sustained pause” in interest rate cuts last month. The 6.5% benchmark is tied with Romania for the highest key interest rate in the European Union.

The central bank targets inflation of 3% over the medium term and has a tolerance band of 1 percentage point around it.

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