National Bank of Romania keeps interest rate unchanged in April

A 13th consecutive hold: At its meeting on 7 April, the National Bank of Romania (NBR) held fire, keeping its NBR reference rate at 6.50%—the highest in the EU. The hold, which had been priced in by markets, was the 13th in a row.

Iran war pushes up NBR’s inflation projections: The NBR decided not to cut due to a deterioration in the inflation outlook following the outbreak of war in the Middle East in late February: The Bank expects headline inflation to increase more than previously anticipated in March–June due to notably higher prices for oil and gas. Additionally, the Bank noted that inflation was still more than double the upper bound of the Bank’s 1.5–3.5% target range in January–February, despite easing from December. On the flipside, the NBR likely decided not to hike due to weak economic activity and softening employment and wage data.

Rate cuts likely to resume in Q4: The National Bank of Romania did not provide explicit forward guidance on future interest rate changes. Our Consensus is for rates to end 2026 below their current level, although the majority of our panelists do not expect the NBR to resume cutting until Q4. The Bank will reconvene on 15 May.

Panelist insight: ING’s Valentin Tataru and Stefan Posea commented: “While favourable base effects expected over the summer still stand, the level of inflation at which the NBR feels comfortable beginning to cut rates becomes increasingly important. With this new oil shock, an earlier easing cycle looks less likely.”

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