FX.co ★ Romania Central Bank Holds Rate for Tenth Straight Meeting

The National Bank of Romania decided to maintain its benchmark interest rate at 6.50% on November 12th, marking the tenth consecutive pause in rate changes, in line with market expectations. This decision is intended to balance price stability with the support of economic growth. In September, inflation ticked up slightly to 9.88% from 9.85% in August, driven by increases in fuel, energy, and non-food prices, which outweighed the declines in food and tobacco prices. While the National Bank of Romania anticipates a gradual easing of inflation, it is expected to remain above initial forecasts due to the lifting of the electricity price cap and recent tax increases. The labor market showed minor job losses with a slight decrease in unemployment, hovering around 6%, while wage growth continued robustly. Policymakers emphasized concerns over fiscal uncertainties related to the EU's structural plan and external risks from trade tensions, the ongoing conflict in Ukraine, and EU investment priorities. The bank stressed the importance of utilizing EU funds to mitigate fiscal tightening and support necessary reforms.