The Reserve Bank of India (RBI) has cut the repo rate by 25 basis points to 6.25 percent, the first rate cut since May 2020. The decision was made in an effort to mitigate the economic impact of slowing global growth and inflationary risks. The rate cut is expected to benefit rate-sensitive sectors such as banking, auto, and real estate, as lower borrowing costs will spur credit demand. Non-banking financial companies (NBFCs) are also well-positioned to benefit. The bond market has responded positively to the rate cut, with the 10-year benchmark bond yield dropping by 20 basis points. The declining interest rate environment has also led to renewed interest in alternative assets such as cryptocurrency.



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