BUDAPEST, Dec 20 (Reuters) - Hungary's central bank will reduce funds its 3-month deposits further by the end of March and is ready to loosen monetary conditions further via unconventional tools if needed, the bank said in a statement on Tuesday.
The Monetary Council decided to set a 750 billion forint ($2.50 billion) cap on the stock of three-month central bank deposits effective at the end of the first quarter of 2017.
"The Council expects that this decision, consistent with the gradual steps taken so far, will mean the crowding out of at least HUF 100-200 billion additional liquidity from the deposit facility," it said.
Earlier, the bank kept its base rate on hold.
"If subsequently warranted by the achievement of the inflation target, the Council will stand ready to ease monetary conditions further using unconventional, targeted instruments," it said. ($1 = 300.2 forints) (Reporting by Krisztina Than and Gergely Szakacs)