Video narration
What actually happens when the RBI raises the Repo Rate-and how would you answer that in a banking-awareness question? The Repo Rate is the rate at which the RBI lends money to commercial banks. So, when inflation rises, the RBI may raise it. Here's the chain: banks now borrow at a higher cost. They raise loan interest rates. You borrow less. Consumers and businesses spend less. Demand falls, helping ease inflationary pressure. That's the turn: stop memorizing isolated facts. Trace the chain, and the answer follows. So if the question asks what a Repo Rate increase does, the answer is: it makes borrowing costlier, reduces spending and demand, and helps bring inflation down. With Guidely, understand concepts, practise questions, and prepare for IBPS, SBI, RBI, and other competitive exams through structured, exam-focused learning and expert guidance. Prepare smarter with Guidely. Your preparation. Smarter.