Romania's borrowing costs eased as liquidity stabilized and inflation cooled, but rate hikes may return amid persistent inflation risks.

Romania’s interbank liquidity has stabilized, leading to a slight drop in the 3-month ROBOR rate to 6.50%, reflecting improved market conditions and lower inflation. The National Bank of Romania reports ongoing normalization of financial conditions, supporting a gradual decline in borrowing costs. Foreign exchange reserves fell to EUR 65.015 billion in September, while unemployment dropped to 3.18% in August. Despite current rate declines, officials warn inflationary pressures may prompt future increases. Romania continues budget adjustments, strengthens defense cooperation with Ukraine, and advances plans for joint drone production.