The repo rate, set by the central bank, significantly impacts both individuals and businesses: Individuals: A lower repo rate usually leads to lower interest rates on loans and mortgages, making borrowing cheaper. This can increase consumer spending and investment in property or education. Conversely, a higher repo rate can lead to higher interest rates, making loans more expensive and reducing consumer spending. Businesses: For businesses, a lower repo rate can reduce the cost of borrowing, encouraging expansion and investment. It can also lead to lower interest rates on business loans, improving cash flow and profitability. A higher repo rate can increase borrowing costs, potentially slowing down business growth and expansion plans.