Romania’s central bank has opted to sustain interest rates at the highest level across the European Union, reinforcing its stance amid mounting political instability and a depreciating leu. Despite concerns that elevated borrowing costs may stifle economic growth, policymakers emphasize the necessity of a tight monetary environment to combat persistent inflationary pressures and stabilize the currency. The decision reflects a wary approach in the face of global economic volatility and domestic fiscal challenges, as officials navigate uncertain terrain marked by government infighting and delayed reforms.

The leu’s recent weakening has compounded fears, prompting the National Bank of Romania to maintain a cautious outlook. Inflation remains stubbornly above target, fueled by supply disruptions and energy price volatility. Key factors influencing the rate…