Romania Interest Rate

NBR keeps interest rates in May at highest level in the EU

National Bank of Romania holds fire, as expected: At its meeting on 15 May, the National Bank of Romania (NBR) stood pat once again, keeping its NBR reference rate at 6.50%—the highest in the EU. The hold was the 14th consecutive and matched market expectations.

Energy shock clouds inflation outlook: The NBR kept rates unchanged as the Iran war has pushed up energy costs. The Bank noted that headline inflation has reversed its earlier downtrend and warned that it would likely rise more than previously expected in Q2 2026 due to higher energy costs and other supply-side factors. On the flipside, the NBR avoided hiking rates because economic activity has weakened further; GDP contracted again in Q1 2026, with retail sales, industrial production, employment, wage growth, and labor cost dynamics all declining.

NBR to maintain tight stance through mid-year: The NBR did not provide explicit forward guidance on future interest rate moves. A majority of our panelists expect rates to end 2026 below current levels as the Central Bank aims to boost economic activity. That said, monetary policy easing will likely only resume in H2. A weaker-than-expected leu, delays to fiscal consolidation and persistently high energy prices linked to the Middle East conflict pose upside risks to rates. The Bank will reconvene on 8 July.

Panelist insight: Erste Bank’s Vlad Ionita said: “We expect the key policy rate to remain unchanged throughout 2026, with the first rate cut likely only in Q2 2027, given the revised inflation path and the recent depreciation of the RON. We consider rate hikes to be highly unlikely.”

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