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MacroSpark Labs

Monetary Policy Simulator

Adjust the central bank's repo rate and see the modeled effect on borrowing costs, inflation, and GDP growth through the monetary policy transmission mechanism.

Current repo rate

%

Change in repo rate

0.5 pts

This is a simplified educational model using illustrative elasticities/multipliers, not an official RBI/government forecasting model — figures are computed live from your inputs but should not be used for real policy decisions. It assumes a baseline lending rate of repo + 2.5 pts, an 0.8x lending-rate passthrough, a −0.3 pt GDP growth impact and a −0.5 pt inflation impact per 1 pt of repo change, phased in over four quarters (20% / 50% / 80% / 100%) to represent monetary policy transmission lag.

Projected Lending Rate9.40%
GDP Growth Impact (full effect)
-0.15% pts
Inflation Impact (full effect)
-0.25% pts
New Repo Rate
7.00%

Transmission Over 4 Quarters

-0.27%-0.20%-0.14%-0.08%-0.01%Q1Q2Q3Q4
GDP Growth ImpactInflation Impact