This morning’s decision by the National Bank of Romania (NBR) to cut interest rates by 50bps to 7% is testament to the more stable political outlook that has emerged since the end of last year. With the IMF/EU programme back on track, and the leu strengthening, we think that rates could fall to 6% by the middle of this year. However, much still rests on global risk appetite, and in any case, lower interest rates will do little to revive Romania’s ailing economy in the near-term.