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.

After nearly five years, the RBI has cut the repo rate, bringing relief to home loan borrowers and expected to ease borrowing costs.

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.