Romania: Last meeting of 2025 sees rates unchanged
Bank holds fire as expected by markets: At its last meeting of the year on 12 November, the National Bank of Romania (BNR) decided to maintain its benchmark interest rate at 6.50%, in line with market expectations. As a result, interest rates remain among the highest in the EU alongside Hungary; the hold marked the 10th consecutive meeting at which the BNR left rates unchanged.
Deteriorating inflation outlook drives hold: The Central Bank’s decision was primarily influenced by the need to limit the recent rise in inflation, which accelerated to an over two-year high in September. Price pressures picked up in Q3, bolstered by the expiration of the electricity price cap scheme on 1 July and by tax hikes aimed at reducing the government’s budget deficit.
Rate cuts to resume in 2026: The National Bank of Romania will likely resume monetary policy loosening in the third quarter of 2026, as it forecasts a substantial decline in inflation from the fading effects of the expiration of the electricity price cap and higher VAT and excise duty rates that started over the summer and caused a temporary increase in price pressures. A vast majority of our panel shares this view, while a minority has penciled in a cut as early as Q2 2026 and the remaining panelists forecast reductions to resume in Q4. Our Consensus is for rates to end 2026 approximately 100 basis points below current levels.
The BNR is scheduled to reconvene on 19 January 2026.
Panelist insight: On the monetary policy outlook, ING’s Valentin Tataru commented:
“On the latter, we maintain our view that the first 25bp rate cut could come in May 2026, with a cumulative 100bp of cuts in 2026. An important known unknown for this scenario is the government’s cap on natural gas prices, which is set to expire at the end of March 2026, potentially triggering a one-off increase in gas prices. Still relevant but possibly less impactful should be the temporary cap on mark-ups for basic food items, which should eventually be lifted in the same period.”