Risks to the leu exchange rate remain high, amid the conflict in the Middle East, persistently large budget and external deficits, and uncertainties stemming from the domestic political situation, according to the minutes of the October 8, 2026, monetary policy meeting of the National Bank of Romania (BNR) Board, published on Tuesday.
"Risks to the leu exchange rate remain high, Council members argued, pointing to the marked volatility in global risk aversion amid the conflict in the Middle East, the monetary policy stances of major central banks and those in the region, andmost notablythe still-large 'twin deficits' and their financing structure, as well as uncertainties stemming from the domestic political situation. During the discussions, emphasis was placed on the importance of political and governmental stability, the need to continue fiscal consolidation in line with the medium-term fiscal-structural plan agreed upon with the European Commission, and the imperative of attracting European fundswhich are essential, not least due to their implications for the economy's external position and the sovereign risk premium, and, by extension, for the financing costs of both the public and private sectors," the document states, agerpres reports.
The Council members also highlighted the rise in the leu/euro exchange rate at the end of September and the beginning of October.
"In the discussions regarding financial conditions, the Council members noted that the main interbank money market rates remained flat throughout August and the first ten days of September, before undergoing successive upward adjustmentswhich were more pronounced in the first few days of October. At the same time, it was observed that medium- and long-term government bond yields experienced increased volatility in the first part of September, followed by a significant risedriven by the conflict in the Middle East, as well as the domestic political situation and associated uncertaintiesthough this increase was largely corrected in the first few days of October. In this same context, the leu/euro exchange rate accelerated its upward trend in September; by the end of the month and into early October, it recorded a sharp, significant increase, subsequently stabilizing at this new, higher level. Meanwhile, the leu/USD exchange rate rose considerably, reflecting the substantial strengthening of the US currency in international financial markets," the minutes state.
Regarding the economic outlook, the NBR drew attention to the uncertainties surrounding the measures required to reduce the budget deficit.
"At the same time, the document highlights the significant uncertainties that remainincluding those stemming from the current domestic political situationregarding measures that might be adopted in the future to keep the budget deficit, beyond the current year, on a sustainable downward trajectory that is consistent with both the medium-term structural-budgetary plan agreed upon with the EC and the excessive deficit procedure," the document states.
The national currency depreciated on Tuesday against the euro, which was set by the National Bank of Romania (BNR) at 5.3285 leian increase of 0.13 bani (+0.02%) compared to the previous rate of 5.3272 lei.
