Romania’s central bank keeps base rate at 6.5%, anticipates widening aggregate demand deficit

Romania’s central bank (BNR) on November 12 decided to keep the monetary policy rate at 6.5%, in line with the consensus expectations. It has also updated the Inflation Forecast, anticipating a widening aggregate demand deficit with an impact on the disinflation trajectory, particularly after the end of September 2026, when the transitory inflation episode subsides.

According to the forecast included in the report, the annual inflation rate will witness a modest decline in the following three quarters, on a fluctuating path significantly higher than that in the previous projection, amid the above-expectations transitory direct effects exerted by the expiry of the electricity price capping scheme on July 1 and by the increases in VAT rates and excise duties starting August 1.