National Bank of Romania board keeps monetary policy rate unchanged at 6.50% per annum

 The Board of the National Bank of Romania (BNR) decided at its meeting on Tuesday to keep the monetary policy rate unchanged at 6.50% per annum, the central bank said in a press release sent on Tuesday.According to the source, Board members also decided to maintain the lending facility (Lombard) rate at 7.50% per annum and the deposit facility rate at 5.50% per annum, as well as to keep the current levels of minimum reserve requirement ratios for both leu- and foreign currency-denominated liabilities of credit institutions unchanged."Based on current assessments and available data, as well as in the context of very high uncertainty, the BNR Board decided at today's meeting, April 7, 2026, to maintain the monetary policy rate at 6.50% per annum. At the same time, it decided to keep the lending facility (Lombard) rate at 7.50% per annum and the deposit facility rate at 5.50% per annum. The BNR Board also decided to maintain the current levels of minimum reserve requirement ratios for leu- and foreign currency-denominated liabilities of credit institutions," the release reads.The BNR Board's decisions aim to ensure and maintain price stability over the medium term in a manner conducive to sustainable economic growth.The Board also reiterated that, in the current context, a balanced macroeconomic policy mix and the implementation of structural reforms, including through the use of European funds to stimulate long-term growth potential, are essential for macroeconomic stability and for strengthening the Romanian economy's resilience to adverse developments.BNR added that it is closely monitoring domestic and international developments and stands ready to use its available instruments to achieve its primary objective of medium-term price stability, while preserving financial stability.Romania's annual inflation rate slowed in the first two months of 2026, reaching 9.31% in February from 9.69% in December, according to the National Bank of Romania (BNR), although new pressures are expected in the coming months.The decline was mainly driven by lower electricity and natural gas prices, partly offset by increases in processed food, administered prices, tobacco and fuel costs. Core inflation also eased slightly, to 8.3% in February from 8.5% in December, amid disinflationary base effects, lower agri-food commodity prices, weaker import price dynamics and softer consumer demand.The annual inflation rate based on the Harmonised Index of Consumer Prices (HICP) fell to 8.3% in February from 8.6% in December. However, average annual inflation continued to rise, reaching 8.1% (CPI) and 7.3% (HICP), respectively.BNR data show that economic activity contracted by 1.9% in the fourth quarter of 2025, following a 0.1% decline in the previous quarter, pointing to a widening negative output gap. Annual GDP growth slowed sharply to 0.2% in Q4, from 1.7% in Q3, mainly due to a negative contribution from inventories and weaker household consumption.At the same time, investment remained robust, while net exports turned expansionary again, contributing to a further narrowing of the trade deficit and a slight decline in the current account deficit, despite a deterioration in income balances.Recent data indicate a modest recovery in economic activity in the first quarter of 2026 compared with the previous quarter, albeit accompanied by a further slowdown in annual GDP growth.The central bank warned that significant uncertainties and risks stem from the war in the Middle East and the global energy crisis, which could affect consumer purchasing power, corporate profitability and financing costs, including through shifts in investor sentiment towards the region.In this context, the absorption of European funds, particularly those under the National Recovery and Resilience Plan (PNRR), remains essential to offset the contractionary effects of fiscal consolidation and external shocks, as well as to support structural reforms and the energy transition.BNR also highlighted the importance of monetary policy decisions by the European Central Bank and the Federal Reserve, as well as the stance of regional central banks.Financial market developments reflected rising uncertainty, with government bond yields increasing sharply in March amid deteriorating investor sentiment following the outbreak of the Middle East conflict. The leu weakened moderately against the euro before stabilising, supported by improved foreign exchange market flows.Credit to the private sector showed signs of stabilisation, with annual growth edging up to 6.8% in February from 6.2% in December, driven by both leu- and foreign currency-denominated lending.The minutes of the monetary policy meeting of April 7, 2026 will be published on the BNR website on April 22, 2026 at 15:00.The next monetary policy meeting of the BNR Board is scheduled for May 15, 2026.