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.

The Reserve Bank of India has cut its key interest rate for the first time in nearly five years, as cooling inflation has offered room to stimulate the slowing economy. The central bank set the real GDP growth forecast at 6.

The MPC under the central bank projected the Indian economy to clock a growth rate of 6.7 per cent in the upcoming 2025-26 fiscal year (FY26).