ING’s Frantisek Taborsky expects the National Bank of Romania to keep rates at 6.50%, with inflation still high but projected to ease mid-year. He looks for dovish signals in the new forecast, anticipating the first rate cut in May and 100bp of easing in 2026, while EUR/RON is seen staying broadly stable near 5.09–5.10 before a modest year-end rise to 5.150.

Rates on hold as EUR/RON stays rangebound

"The National Bank of Romania is likely to leave rates unchanged at 6.50% today. The central bank has been holding rates steady since August 2024 after the presidential election brought significant volatility to the market, and inflation jumped slightly below 10% after the government raised some taxes.

"Today's meeting will also bring a new forecast and inflation report, where we will look for signs of dovishness. In particular, Friday's GDP figures indicate an economy heavily hit by fiscal consolidation, which should support the NBR in implementing rate cuts sooner rather than later. We expect the first cut in May and 100bp this year in total."

"EUR/RON remains roughly stable in the range of 5.090-100, and we do not expect the central bank to provide more FX flexibility. In particular, sticky inflation does not allow the central bank room for additional inflationary pressures, and we expect that any upward movement in the EUR/RON level would come only after the first rate cuts at the end of the year. Our forecast for the year-end level is 5.150."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)