Romania’s central bank is widely expected to keep its key interest rate unchanged at 6.5% through at least the first quarter of 2026, despite a slowdown in economic growth, as analysts cite persistent inflation risks stemming from recent fiscal and energy market reforms.

The National Bank of Romania (BNR) is scheduled to hold a monetary policy board meeting on August 8, with markets awaiting the accompanying press release and the August Inflation Report for updated projections. The report is expected to reflect the monetary authority’s assessment of the impact of the August 1 VAT hike and the liberalisation of electricity prices in July.

Erste Group said in a research note that the BNR will likely remain on hold “at least until the first quarter of 2026,” citing inflation pressures from recent fiscal adjustments. The group anticipates that the upcoming inflation report will include an upward revision to short-term inflation projections.

According to Erste, headline inflation could reach 7.5% by year-end, assuming a 30% increase in electricity prices, a 60% pass-through from VAT hikes, and full pass-through of higher excise duties. Core inflation is projected at 6.5% year-on-year by the end of 2025.

“Despite the economy likely growing well below potential over the next four quarters, we do not expect rate cuts until inflation is clearly on a path to target,” Erste Group said, adding that the February 2026 Inflation Report may open the door to a possible first cut.

ING Romania holds a similar view, forecasting no change to the current 6.5% policy rate at the August 8 meeting. The bank expects inflation to remain in the high single-digit range in the coming months, peaking above 8.0% in September or October, with year-end inflation seen at 7.9%.

ING analysts said that while recent fiscal reforms have improved policy visibility, they have also introduced additional inflation risks. “No cuts are expected until at least the first quarter of 2026,” the bank noted, with some room for easing from the second quarter if disinflation trends are confirmed.

On the currency front, ING Romania projects the leu to depreciate moderately, ending the year at RON5.1 to the euro. “The RON remains significantly overvalued,” the bank stated, warning that pressures from the wide current account deficit and weak fiscal consolidation could push the EUR/RON rate higher after the inflation peak.