Romania's central bank keeps key interest rate at 6.5%, sees inflation falling sharply in the third quarter

The National Bank of Romania estimates that the annual inflation rate started to decrease slightly in June and will record a significant reduction in the third quarter of this year. At the same time, the BNR Board of Directors decided on Wednesday to maintain the key interest rate at 6.5%, citing uncertainties related to the domestic economy and the international context.

BNR indicates, in a statement issued after the monetary policy meeting, that a more pronounced decrease in inflation is expected due to the dissipation of the effects caused by the removal of the electricity price cap and the increase in VAT and excise duties.

• Romania remains the country with the highest inflation in the EU. Prices have increased nearly three times more than the European average

Lower price pressures, but many uncertainties

According to the central bank, in the longer term, deflationary pressures resulting from slowing demand will also emerge, in the context of budget consolidation initiated last year and continued in 2026.

However, BNR warns that the inflation outlook remains affected by numerous uncertainties, including possible new fiscal measures that could be adopted to further reduce the budget deficit.

At the same time, the central bank draws attention to external risks, especially the conflict in the Middle East and shocks in energy markets, which can influence purchasing power, company activity, and financing costs.

• BNR has revised its inflation forecast upwards. Isărescu warns: We need the government. We cannot manage on our own

PNRR, essential for the economy

In this context, BNR emphasizes that the absorption of European funds, especially those from the PNRR, is essential to limit the effects of budget consolidation and geopolitical tensions on the economy.

Furthermore, developments will also depend on the monetary policy decisions of the European Central Bank and the US Federal Reserve, as well as the measures adopted by central banks in the region.

• Economist: PNRR has become the National Plan of Failed Reforms. Romania is on the verge of saying goodbye to 8.7 billion euros

Key interest rate remains at 6.5%

The BNR Board of Directors decided to keep the key policy interest rate unchanged at 6.50% per year.

The other interest rates administered by the central bank were also maintained:

• the interest rate for the lending facility (Lombard) – 7.50% per year;
• the interest rate for the deposit facility – 5.50% per year.

Additionally, BNR kept the current levels of mandatory reserve requirements for liabilities in both lei and foreign currency of credit institutions.