RBI rate cut will have positive impact on auto sector: SIAM

New Delhi: Automotive sector will benefit from the positive impact of the Reserve Bank of India cutting key interest rate by 25 basis points as it will decrease financing costs and create positive sentiments in the market, Society of Indian Automobile Manufacturers said on Wednesday.

The Reserve Bank of India (RBI) cut interest rates for a second consecutive time by cutting the repurchase or repo rate by 25 basis point to 6 per cent. It had reduced rates by an equal measure in February -- the first cut since May 2020.

The move lowers borrowing costs to the lowest level since November 2022, amid easing inflation and a fall in oil prices.

Reduction in rates at this time would have a positive impact on the auto sector, Society of Indian Automobile Manufacturers (SIAM) President Shailesh Chandra said in a statement.

Chandra, who is also Managing Director of Tata Passenger Vehicles Ltd & Tata Passenger Electric Mobility Ltd, further said, "It will increase accessibility by reducing the financing costs, thereby creating a positive sentiment across the market."