ING expects the National Bank of Romania (NBR) to keep the policy rate at 6.50%. Inflation remains high and is still close to 10% after recent tax increases, although it is expected to ease from mid-year.
The NBR has kept rates unchanged since August 2024, after market volatility following the presidential election. This meeting will also bring an updated forecast and inflation report, alongside new GDP data tied to fiscal consolidation.
Policy Outlook And Near Term Expectations
ING expects the first rate cut in May, with total easing of 100bp in 2026.
EUR/RON is expected to stay broadly stable in the 5.09–5.10 range. A small rise is forecast later in the year, with a year-end target of 5.150.
In early 2025, the call that the NBR would begin cutting rates was right, although the first cut came in June rather than May. The EUR/RON stability forecast near 5.09 also held through the first half of the year, before the pair began a gradual climb. EUR/RON is now trading above the 5.15 end-2025 target and is currently near 5.18.
The main change now is that disinflation has sped up. January 2026 CPI shows inflation at 4.8%, far below last year’s levels. This gives the NBR room to ease policy further from the current key rate of 5.50%. With Q4 2025 GDP growth at a weak 1.2% year-over-year, the case for larger rate cuts in the next few months looks strong.
For derivatives traders, this points to continued RON weakness versus the euro. We see value in buying near-term EUR/RON call options, looking for a move toward 5.20–5.22 over the next one to two months. This approach offers exposure to the expected policy divergence while keeping risk limited and defined.
Derivatives Positioning And Volatility Considerations
The NBR has often managed the exchange rate to limit sharp swings. However, weaker fundamentals may make it harder to resist the market trend. The 2024 post-election turmoil showed the NBR will prioritize stability, but we think it will still allow (and manage) a gradual weakening in the currency. As a result, implied volatility may be too low. For traders expecting a bigger move around the next NBR meeting, long-volatility strategies such as straddles could be worth considering.
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