The repo rate, set by the RBI, influences borrowing costs for banks. A higher repo rate raises FD interest rates, attracting deposits, while a lower rate reduces FD returns by making borrowing cheaper.

The rate cut could be the beginning of a low-interest cycle and is expected to ease the burden on loan borrowers, as banks prepare to lower interest rates on home loans, auto loans, & business credit

The Reserve Bank of India (RBI) reduced its key repo rate on Friday for the first time since May 2020, aiming to provide stimulus to the sluggish economy, which is projected to grow at its slowest pace in four years during the current fiscal year.