Romania firm on maintaining interest rates unchanged until at least the first quarter of 2023
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In a cautious move to manage ongoing inflationary pressures and fiscal reforms, the National Bank of Romania (BNR) has decided to keep the monetary policy rate steady at 6.50% at least until the first quarter of 2026 [1][2][5]. This decision reflects the BNR's approach to maintain a balance between inflation control and economic stability.
The inflation outlook in Romania has worsened significantly in 2025, primarily due to the expiry of the electricity price capping scheme in July and simultaneous increases in VAT and excise duties starting August 1 [1][2][3]. These factors are expected to cause a sharp inflation surge, peaking around September–October 2025, possibly reaching above 9% in annual terms before gradually easing in 2026 [1][2][3].
The July liberalisation of the energy market, ending electricity price caps, is a major contributor to the short-term inflation spike, adding around two percentage points to inflation [1][3]. The government's fiscal and budgetary reform packages implemented from August 2025, including VAT and excise hikes as well as austerity measures, also contribute to inflation in the short run due to higher indirect taxes [1][4].
Despite the current inflationary pressures, the BNR expects inflation to remain elevated and volatile through late 2025 and early 2026. However, the central bank forecasts a steep disinflation in Q3 2026 once the inflationary impacts of energy liberalisation and tax changes dissipate, with inflation returning gradually towards the central bank's target range (~2.5%) by end-2026 [1][3].
Analysts concur on the central bank’s strategy to keep the monetary policy rate unchanged through Q1 2026, as cutting rates prematurely amid high inflation would be counterproductive. Some easing of rates may be considered in the second half of 2026 conditional on sustained disinflation and weaker aggregate demand due to fiscal tightening [2][5].
In summary, the July energy market liberalisation and fiscal reforms in Romania have led to an expected short-term surge in inflation. The monetary policy rate is projected to be held steady at 6.50% until at least early 2026 to balance inflation control and economic stability. Inflation is expected to peak in late 2025 and then decline gradually through 2026 as disinflationary pressures from reduced fiscal deficit and fading one-off shocks take effect [1][2][3][4][5].
[1] National Bank of Romania (BNR) Monetary Policy Decision, July 2025 [2] ING Romania Forecast: Romania’s Inflation Outlook, August 2025 [3] Erste Group Forecast: Romania’s Economic Outlook, August 2025 [4] Government of Romania Fiscal and Budgetary Reform Package, August 2025 [5] Analysts’ Consensus: Romania’s Monetary Policy Outlook, August 2025
In this financial context, the decision to keep the monetary policy rate steady by the National Bank of Romania (BNR) indicates a business strategy aimed at maintaining economic stability and controlling inflation. The inflationary surge in Romania in 2025 is primarily due to changes in energy and business taxes, contributing to both the short-term inflation spike and overall inflation levels.
