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.

Usually, a reduced repo rate set by the central bank helps the real estate sector. However, most banks will only reflect those changes in lending rates after two to three months, and during this period, even a basic reduction of twenty-five basis points will change home loan repayments.

On Friday, the Reserve Bank of India’s (RBI) six-member Monetary Policy Committee (MPC) reduced the repo rate, the rate at which the RBI lends to commercial banks by 25 basis points, bringing it down to 6.