In line with expectations, the National Bank of Romania (BNR) on August 10 decided to keep the key policy rate unchanged at 6.50%.
BNR reiterated expectations for headline inflation to drop sharply during Q3 from double-digit rates in Q2, but it also mentions “notable uncertainties and risks” generated by the future evolution of electricity and food prices, amid this year’s severe drought, as well as from the trajectory of crude oil prices.
Under the official projections for the inflation trajectory, rather confirmed by independent analysts, BNR is not expected to change the monetary policy over the coming quarters, Erste Group says.
There were no indications of a potential upward revision to the inflation forecast compared with the May projections, Erste Group says in a research note.
BNR will publish the updated quarterly Inflation Report on August 13. Under the May 2026 Report, inflation is expected at 5.7% y/y in September, 5.5% at the end of this year (versus 5.9% y/y projected by Erste) and 2.9% y/y one year later.
Great uncertainties remain associated, including in the current domestic political situation, with the measures potentially adopted in the future to continue budgetary consolidation beyond the current year in accordance with the Medium-Term Budgetary-Structural Plan agreed with the EC and the excessive deficit procedure, BNR added in its August 10 monetary decision release.
BNR also notes that the latest data indicate a slight recovery in economic activity during Q2-Q3 2026, driven mainly by improved performance in Q2 compared with the previous year. Major components of domestic demand showed similar improvements, although developments across key economic sectors remained mixed.
(Photo: Lcva/ Dreamstime)
iulian@romania-insider.com
Leave a Reply