Romania Keeps Interest Rates Unchanged as Inflation Nears 10% Threshold

The National Bank of Romania (NBR) announced on January 19, 2026, that it would hold its benchmark interest rate unchanged at 9.5%, marking the third consecutive meeting without a rate adjustment. This decision comes as inflation climbed to 9.8% in December 2025, just below the 10% threshold that had prompted speculation of further tightening. The central bank cited uncertainty over the persistence of inflationary pressures, particularly in services and energy, despite a moderation in food inflation. The decision reflects a balancing act between controlling inflation and avoiding a sharp slowdown in economic activity. The NBR acknowledged that core inflation remains elevated at 6.4%, driven by wage growth and high service sector costs. However, it noted that GDP growth in the final quarter of 2025 slowed to 2.1% annually, raising concerns about the effectiveness of tighter monetary policy on demand. Financial markets reacted with a modest strengthening of the leu, which appreciated 0.7% against the euro following the announcement. Bond yields on 10-year Romanian government debt dropped to 9.1%, indicating investor confidence in the central bank’s commitment to price stability. The move also influenced regional sentiment, with Hungary’s central bank signaling a similar pause in its rate cycle. The unchanged rate stance may affect consumer lending costs, which remain elevated. Mortgage rates for new home loans averaged 13.2% in January 2026, while personal loan rates stood at 17.8%, reflecting the cumulative impact of the last two years of rate hikes.