Romania Holds Policy Rate at 6.5%

The National Bank of Romania kept its key policy rate unchanged at 6.5% in June 2026, as expected, citing persistent uncertainties and geopolitical risks. Headline inflation rose to 10.85% in May, reaching its highest level since April 2023, driven by higher natural gas and fuel prices, as well as increased rents for state-owned housing. Economic activity is estimated to have contracted 1.2% in Q1 2026, following 0.2% growth in Q4 2025, as household consumption weakened and investment growth slowed. Looking ahead, the outlook remains dependent on Middle East developments, although economic activity is expected to recover slightly in Q2 amid changes in aggregate demand and key sectors. Inflation is projected to ease significantly in Q3 2026 following the removal of the electricity price cap. Future policy decisions will focus on maintaining price stability and supporting sustainable economic growth.

The National Bank of Romania held its benchmark interest rate unchanged at 6.50% in May 2026, as expected, citing high uncertainty from energy markets, fiscal consolidation and geopolitical tensions. In April 2026, inflation accelerated further to 10.71% from 9.9% in March, driven by higher gas, fuel and regulated prices, alongside oil price gains, base effects and rising rents for state housing. HICP inflation also increased to 9.5%. Looking ahead, inflation is expected to rise further in Q2 2026 due to energy shocks, before falling later in the year and gradually returning to target in 2027, assuming continued disinflation from weaker demand and fiscal tightening.

The National Bank of Romania held its benchmark interest rate unchanged at 6.50% at its April 7, 2026 meeting, keeping the lending facility rate at 7.50% and the deposit facility rate at 5.50%. Annual inflation slowed to 9.31% in February from 9.69% in December 2025, driven by lower electricity and gas prices, though fuel and administered prices partially offset the decline. Core inflation edged down to 8.3% in February from 8.5% in December. Economic activity contracted 1.9% in Q4 2025, with annual GDP growth slowing to 0.2% from 1.7% in Q3. Employment declined but the ILO unemployment rate fell in January and February. The NBR expects inflation to rise through June 2026 on higher oil and gas prices before dropping sharply in Q3. The Middle East conflict and global energy crisis remain key risks to growth and inflation. The NBR stands ready to adjust policy as needed to ensure medium-term price stability.