Economic consequences of the political crisis
The leu-euro exchange rate rose again last week, in the context of the political crisis in Romania
Mihai Pelin, 25.05.2026, 13:50
In Romania, the exchange rate for the national currency against the Euro went up again at the end of last week, to almost RON 5.25, a sign that financial markets do not approve of the continuing political tensions as consultations to appoint a new prime minister are dragging.
President Nicuşor Dan appreciated the openness to dialogue of the MPs attending the talks the other day, and stated that good collaboration between institutions is necessary, especially in the current complicated context for the country. During the meetings, priority was given to the current political crisis and prospective solutions to ensure government stability. The agenda of the talks also included topics related to the country’s economic situation, with an emphasis on the measures needed for handling these challenges.
But the talks ended without concrete results, and a new round of consultations is scheduled for the following days, in an attempt to identify a solid pro-Western majority, as the head of state wants.
In this context, the National Bank of Romania (BNR) Friday posted an increased official exchange rate compared to the previous day. The official rate had risen to an all-time high of almost RON 5.27 for the Euro after Parliament’s no-confidence vote that led to the fall of the Bolojan Government, on May 5.
The central bank governor Mugur Isărescu acknowledged that the institution stepped into the foreign exchange market to avoid major fluctuations in the euro-leu exchange rate, in a tense economic and political context. However, he rejected allegations that the central bank had “artificially” preserved the exchange rate.
On the other hand, the Bucharest Stock Exchange closed the last trading session of last week on a downward trend, with most indices ending the day in the red. The main market index, the BET, lost over half a percent, while the total turnover amounted to approx. EUR 20.8 million.
In the regulated market, the most liquid shares were the Transilvania Bank, which generated a turnover of approx. EUR 3.8 million, followed by Romgaz (approx. EUR 1.69 million) and Hidroelectrica (approx. EUR 1 million).
Romania’s economy risks seeing a moderate recession this year, amid overlapping global crises and domestic political instability, analysts warn. In their opinion, political uncertainty is not only a problem of the Romanian political class, but instead it quickly ripples into the economy, affecting investor confidence, postponing investment decisions and amplifying the volatility of financial markets. This situation also further complicates the management of the budget deficit and the implementation of the required reforms.
However, experts say that a gradual recovery is possible. A prospective stabilisation of the political scene could restart economic growth, which is why the estimates for 2027 remain positive. (AMP)
