GES

Indian Economy

Policy Flow Diagrams

Walk through how monetary and fiscal policy decisions ripple through the economy step by step.

How the RBI's repo rate changes ripple through the economy to affect inflation, demand, and GDP growth.

Signals cost of moneyAffects borrowing costChanges spending capacityInfluences price levelsAffects real growthFeedback loopRBI changes Repo RateBank Lending Rates adjustConsumer and Business Borr...Aggregate DemandInflation ImpactGDP Growth ImpactRBI 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%

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