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 cut the repo rate by 25 basis points to 6.25%, marking its first reduction in nearly five years. The central bank aims to balance inflation control with economic growth, maintaining a neutral stance amid mixed expert reactions.

India’s new central bank governor cut interest rates for the first time in almost five years on Friday to help spur a slowing economy as global risks intensify.