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.

Today’s RBI rate cut is seen as the start of a rate-cut cycle that could lead to a gradual decline in the interest rates banks charge on loans.

Reserve Bank of India on Friday cut the repo rate by 25 basis points, ending the longest pause in the history of the monetary policy framework.