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Policy Flow Diagrams Walk through how monetary and fiscal policy decisions ripple through the economy step by step.
Monetary Policy Transmission Fiscal Policy Multiplier Effect How the RBI's repo rate changes ripple through the economy to affect inflation, demand, and GDP growth.
Signals cost of money Affects borrowing cost Changes spending capacity Influences price levels Affects real growth Feedback loop RBI changes Repo Rate Bank Lending Rates adjust Consumer and Business Borr... Aggregate Demand Inflation Impact GDP Growth Impact RBI reassesses and recalib... Step 1: RBI changes Repo Rate The Reserve Bank of India raises or lowers the repo rate (the rate at which banks borrow overnight funds from RBI). This is the primary monetary policy tool.
Current Repo Rate: 6.50%