The central bank’s Board also decided to leave the (Lombard) lending facility rate at 7.5% per year and the deposit facility rate unchanged at 5.5%, respectively, the central bank said in its statement regarding monetary policy decisions.
The bank also decided to maintain the existing levels of minimum reserve requirement ratios on both leu- and foreign currency-denominated liabilities of credit institutions.
The central bank’s Board met on Wednesday for the eighth monetary policy meeting of 2025, after having kept the key rate unchanged in the previous months of the year, and cutting it only twice to 6.5% in 2024 from 7% in 2023.
Please read below the full press statement of the Romanian central bank’s Board after the monetary policy meeting on November 12:
“In September 2025, the annual inflation rate edged up to 9.88 percent, from 9.85 percent in August, given that the new increases in the dynamics of fuel and energy prices, as well as of the non-food sub-components of core inflation were almost entirely offset by the opposite evolution in VFE and tobacco product segments.
In 2025 Q3 overall, the annual inflation rate thus rose to 9.88 percent, from 5.66 percent in June, amid the expiry of the electricity price capping scheme on 1 July and the hikes in the VAT rates and excise duties starting 1 August. The transitory direct effects of the two successive supply-side inflationary shocks affected primarily the aggregate dynamics of exogenous CPI components, owing largely to the hefty rise in electricity prices and the more modest advance in fuel prices, the impact of which was mitigated to a small extent by the significant deceleration of VFE price growth, on the back of the decline in prices of fruit and vegetables.
In turn, the annual adjusted CORE2 inflation rate posted a faster increase in 2025 Q3, climbing to 8.1 percent in September, from 5.6 percent in June. This reflects an almost full pass-through of VAT rate hikes to consumer prices, also amid the resilience of demand in certain segments and high short-term inflation expectations. Additional moderate influences came from the still fast dynamics of wage costs and indirect effects of the rises in electricity and fuel prices, as well as from higher prices of some agri-food commodities and the increase in the EUR/RON exchange rate.
In October 2025, the annual inflation rate fell slightly to 9.76 percent, given that the decreases in the dynamics of fuel and VFE prices were only partly counterbalanced, in terms of impact, by the further swifter increase in energy prices, as a result of the hike in natural gas prices, while the annual adjusted CORE2 inflation rate remained unchanged at 8.1 percent.
The annual inflation rate calculated based on the Harmonized Index of Consumer Prices (HICP – inflation indicator for EU Member States) rose to 8.4 percent in October 2025, from 5.8 percent in June 2025. The average annual CPI inflation rate went up to 6.6 percent in October, from 5.1 percent in June, while the average annual HICP inflation rate climbed to 6.2 percent in October, from 5.3 percent in June.
The new statistical data reconfirm that economic activity advanced by 1.2 percent in 2025 Q2, after stagnating in the previous quarter, which implies that the aggregate demand deficit widened more modestly in 2025 H1 compared to expectations.
In addition, data reconfirm that the annual GDP growth halted its decrease and remained at 0.3 percent in 2025 Q2, amid the opposite developments across the two main components of aggregate demand. Thus, domestic demand reported a steeper loss of momentum in this period, due largely to the slight contraction in gross fixed capital formation as compared to the similar year-earlier period and the sharp decrease in the positive contribution of change in inventories, whose influences were only partly offset by the increase in household consumption, following the mild decline seen in 2025 Q1.
By contrast, net exports diminished considerably their contractionary impact in 2025 Q2, following the emerging divergence between the further step-up in the annual dynamics of exports of goods and services and the notable decrease in those of imports, in terms of volume. Against this background, trade deficit narrowed visibly from the same year-ago period, while the current account deficit also posted a decline, albeit more modest, on the back of the worsening of the primary income balance.
The latest data and analyses point to a near-stagnation of economic activity for 2025 H2 overall, associated, however, with an increase in annual GDP growth in Q3, amid mixed developments across the aggregate demand components and major sectors as compared to the same year-earlier period.
Specifically, in July-September 2025, retail sales witnessed a small contraction in annual terms, while industrial output continued to decrease slightly in July-August as compared to the similar year-ago period. Conversely, the annual dynamics of the volume of construction works surged in July-August overall, on account of a recovery visible in all segments, particularly in residential construction works. Moreover, the positive differential between the annual change in exports of goods and services and that in imports thereof widened in July-August, as the former posted a relatively more modest decline against the previous quarter. As a result, the trade deficit and the current account deficit recorded steeper annual declines in July-August 2025.
Looking at the labor market, the recent data show new decreases in the number of employees economy-wide in July and August, as well as a small drop in the ILO unemployment rate in 2025 Q3 overall, after its rise to and stay at an average of 6.0 percent in Q1-Q2. At the same time, the October surveys indicate a slight revival of hiring intentions over the very short horizon, after the abrupt weakening in Q3, and a contraction in labor shortage reported by companies, yet smaller than the advance recorded in 2025 Q3 overall. The annual growth rate of the nominal gross wage went down further in July-August, remaining however relatively high, while that of the nominal unit wage costs in industry regained momentum in August, returning to a double-digit level.
The main interbank money market rates accelerated somewhat their decline in the first month of 2025 Q4, remaining however above the April levels, while medium- and long-term yields on government securities embarked and stayed since mid-October on a markedly downward course, hitting 12-month lows. The EUR/RON exchange rate saw a relatively abrupt increase in the first 10-day period of October, which was partly reversed afterwards, amid the successive revisions of investor expectations on the outlook for the Fed’s policy rate, but also reflecting the steps taken domestically in the adoption of the second package of corrective fiscal measures.
The annual growth rate of credit to the private sector extended its decrease into September 2025, reaching 7.5 percent from 8.0 percent in August. This was primarily due to the decline in the rate of change of loans to non-financial corporations, but also to the dynamics of leu-denominated housing loans halting their advance and those of domestic currency consumer credit further reducing their double-digit level. The share of the leu-denominated component in credit to the private sector thus continued to narrow mildly, to 69.1 percent in September from 69.3 percent in August.
In today’s meeting, the NBR Board examined and approved the November 2025 Inflation Report, which incorporates the latest available data and information.
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 1 July and by the increases in VAT rates and excise duties starting 1 August. However, the indicator will see a steep downward correction in 2026 Q3, with the fading of the direct effects of the two supply-side shocks, and thereafter it will resume its decrease – yet at a slower-than-previously-envisaged pace and from a relatively higher level –, re-entering in 2027 Q1 and falling slightly into the variation band of the target until the end of the projection horizon, amid stronger disinflationary pressures from the aggregate demand deficit. The latter is anticipated to widen somewhat more markedly than in the previous projection, given the packages of corrective fiscal and budgetary measures implemented as from August 2025.
Uncertainties are, nevertheless, further associated with the measures likely to be adopted in the future in order to continue budget consolidation in line with the National Medium-Term Fiscal-Structural Plan agreed with the European Commission and with the excessive deficit procedure.
High uncertainties and risks to the outlook for economic activity, implicitly the medium-term inflation developments, continue to arise from the external environment, given the global trade tensions, as well as the war in Ukraine, on one hand, and the plans to increase defence and infrastructure investment spending in EU countries, on the other.
At this juncture, the full absorption and use of EU funds, especially those under the Next Generation EU program, are essential for partly counterbalancing the contractionary effects of budget consolidation and of geopolitical/trade conflicts, as well as for carrying out the necessary structural reforms, energy transition included.
The ECB’s and the Fed’s monetary policy decisions, as well as the stance of central banks in the region, are also relevant.
Based on the currently available data and assessments, as well as in light of the elevated uncertainty, the NBR Board decided in the meeting held today, 12 November 2025, to keep the monetary policy rate at 6.50 percent per annum. Moreover, it decided to leave unchanged the lending (Lombard) facility rate at 7.50 percent per annum and the deposit facility rate at 5.50 percent per annum. Furthermore, the NBR Board decided to maintain the existing levels of minimum reserve requirement ratios on both leu- and foreign currency-denominated liabilities of credit institutions.
The NBR Board decisions aim to ensure and maintain price stability over the medium term, in a manner conducive to achieving sustainable economic growth. The NBR Board reiterates that, at the current juncture, the balanced macroeconomic policy mix and the implementation of structural reforms, also by using EU funds to foster the growth potential over the long term, are of the essence in preserving a stable macroeconomic framework and strengthening the capacity of the Romanian economy to withstand adverse developments.
The NBR closely monitors developments in the domestic and international environment and stands ready to use the tools at its disposal in order to achieve the fundamental objective regarding medium-term price stability, while safeguarding financial stability.”