Soci\u00e9t\u00e9 G\u00e9n\u00e9rale expects pressure on Romania\u2019s national currency to ease in the short term as the country moves toward either a technocratic cabinet or a reconfigured ruling coalition, but warns that a lasting improvement in investor sentiment has become increasingly unlikely amid the ongoing political crisis.<\/p>\n
\u201cWhile we expect a near-term stabilisation in our base case scenario, a lasting improvement in market sentiment would require a clearer and more sustainable policy framework, something that in our view has become much less likely,\u201d Juan Orts told Bloomberg<\/a>.<\/p>\n The comments come after the dismissal of prime minister Ilie Bolojan through a no-confidence motion backed by the Social Democratic Party and far-right Alliance for the Union of Romanians, triggering renewed volatility in financial markets and concerns over Romania\u2019s reform agenda.<\/p>\n According to SocGen, investors are now paying even closer attention to Romania\u2019s fiscal consolidation efforts, continued access to European Union funds, and the predictability of economic policies. The analysts warned that the political turmoil in Bucharest leaves little room for the future government to dilute budgetary reforms without damaging investor confidence.<\/p>\n Separately, interim finance minister Alexandru Nazare said Romania needs to demonstrate stability and predictability in the coming days to avoid additional financial turbulence.<\/p>\n \u201cMarket reactions are fast, and corrections will be costly,\u201d Nazare said on May 6, as quoted by Economica.net<\/a>.<\/p>\n The Romanian leu weakened sharply following the collapse of the government, while yields on Romanian sovereign bonds initially rose amid concerns regarding fiscal sustainability and the implementation of reforms linked to the Recovery and Resilience Facility. Analysts increasingly warned that prolonged instability could complicate Romania\u2019s capacity to absorb the remaining nearly EUR 10 billion in EU recovery funds before the August 2026 deadline.<\/p>\n