Analysis of Monetary Policy and Repo Rate Decisions
Business Scenario
You are working as an Economic Research Analyst at a commercial bank. Your team has been asked to monitor the latest RBI Monetary Policy decisions and assess their impact on the economy. In this lab, you will analyze the latest Monetary Policy Committee (MPC) announcement, study the Repo Rate decision, and understand how changes in policy rates influence borrowing costs, loan EMIs, inflation, and economic growth
Pre-Lab Preparation
Topic : Repo & Securities Lending
1) Repo and reverse repo
2) Collateral concept
3) Impact of bank rates
4) Stock borrow and lending process
5) Margin and operational flow
Task 1: Navigate the RBI Monetary Policy Section
Objective
Locate the latest Monetary Policy Committee (MPC) announcement.
Objective
Locate the latest Monetary Policy Committee (MPC) announcement.
Instructions
Visit https://www.rbi.org.in
Click Monetary Policy.
Open the latest Monetary Policy Statement.
Answer the following questions.
Visit RBI website https://www.rbi.org.in
1
Click on what’s New tab and then click on more
2
Search for minutes of Monetary Policy committee Meeting
3
Open the minutes of Monetary Policy Committee Meeting Jun 3 to 5 2026 and read the meeting conclusions
4
Read the Resolution part carefully and note down Repo Rate decided in this meeting
As you scroll down read Voting on the resolution to keep repo rate Unchanged
This way you will be able to have update upon RBI monetary policy and its changes
Task 2: Analyze the Repo Rate Decision
Suppose the RBI announces:
Now answer the following questions:
Has the Repo Rate increased or decreased?
Will bank borrowing become cheaper or costlier?
Will loan EMIs likely increase or decrease?
Will economic activity generally increase or decrease?
| Previous Repo Rate | New Repo Rate |
|---|---|
| 6.00% | 5.75% |
Answers
| Previous Repo Rate | New Repo Rate |
|---|---|
| Repo Rate movement | Decreased |
| Cost of borrowing | Cheaper |
| Loan EMIs | Likely decrease |
| Economic activity | Likely increase |
This are some decisions of repo rate increase / decrease can cause
| Situation | Impact |
|---|---|
| Repo Rate increases | Loans become costlier, borrowing slows, inflation may reduce |
| Repo Rate decreases | Loans become cheaper, borrowing increases, investment and consumption may rise |
Congratulations on completing this lab! You explored the RBI Monetary Policy framework, analyzed the latest Repo Rate decision, and understood how changes in the Repo Rate affect borrowing, lending, loan EMIs, inflation, and overall economic activity. These concepts provide a strong foundation for understanding monetary policy and its role in the financial system.
Checkpoint