RBI Rate Cut Fuels Optimism in India's Automotive Sector

The Reserve Bank of India has reduced key interest rates by 25 basis points, benefiting the automotive sector by lowering financing costs and improving market sentiment. The RBI’s repo rate cut marks a continuance of its February action, making borrowing cheaper amidst easing inflation and falling oil prices.

In a move set to invigorate the automotive industry, the Reserve Bank of India announced a 25 basis point reduction in key interest rates. This decision is expected to lower financing costs, enhancing market confidence, according to the Society of Indian Automobile Manufacturers (SIAM).

The central bank reduced the repo rate to 6 percent, marking the second consecutive rate cut following a similar move in February. This drop in borrowing costs reaches levels last seen in November 2022, supported by decreasing inflation and declining oil prices.

SIAM President Shailesh Chandra, also a Managing Director at Tata Passenger Vehicles, highlighted the reduction's potential to make vehicle financing more accessible, thereby boosting positive sentiment in the market.

(With inputs from agencies.)