Romanian Leu Plummets After Government Collapse

Romania’s leu slumped toward 4.5 against the USD, its weakest since May 2025, and hit a record low of 5.2 against the euro after lawmakers ousted Prime Minister Ilie Bolojan’s pro-EU government in a no-confidence vote on Tuesday. The move risks Romania’s sovereign debt ratings, EU funding access, and currency stability. The vote was backed by the far-right opposition and the Social Democrats, who left the ruling coalition last month over unpopular austerity measures. With the next general election not due until 2028 and no history of early elections, analysts see little chance of a snap poll. President Nicusor Dan will likely seek to rebuild the pro-EU coalition under new leadership, while Bolojan will remain interim premier with limited powers until a new government is approved. The budget deficit is forecast to shrink to 6.2% of GDP in 2026, but the next government may struggle to secure support for reforms needed to unlock €8 billion in EU recovery funds, which expire after August.