Experts are optimistic that the 25 bps cut—the first in nearly five years—will make borrowing cheaper and spur the demand for consumer durables, automobiles and homes

EMIs on home and vehicle loans will come down, making it easier for individuals to repay their debts. A lower repo rate makes borrowing cheaper for individuals and businesses, which can lead to increased spending and investment.

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.