Lowering the cash reserve ratio (CRR) by the Reserve Bank of India (RBI) will have a significant impact on credit creation in the economy. The CRR is the percentage of a bank's total deposits that it is required to keep with the RBI in the form of cash reserves. By lowering this ratio, the RBI allows banks to have more funds available for lending and credit creation.

Increased liquidity in the banking system:
- When the RBI lowers the CRR, it effectively reduces the amount of money that banks are required to keep as reserves. This results in increased liquidity in the banking system, as banks have more funds available to lend to borrowers.
- With more funds available for lending, banks can extend more credit to individuals and businesses, thereby facilitating credit creation.

Stimulating economic growth:
- Lowering the CRR is a monetary policy tool used by the RBI to stimulate economic growth. By increasing liquidity and credit availability, the RBI aims to encourage borrowing and investment, which can lead to increased economic activity.
- Increased credit creation can fuel consumption, investment, and overall economic growth, as individuals and businesses have access to more funds for spending and expansion.

Boosting investment and business expansion:
- Lowering the CRR can also incentivize businesses to borrow and invest in expanding their operations. With easier access to credit, businesses can fund new projects, invest in research and development, and expand their production capacity.
- This increased investment and business expansion can have a positive impact on employment generation and overall economic development.

Supporting priority sectors:
- Lowering the CRR can also benefit specific sectors that are considered priority sectors for development, such as agriculture, small and medium enterprises (SMEs), and infrastructure.
- With increased credit availability, banks can allocate more funds to these priority sectors, which in turn can support their growth and development.

Overall, by lowering the cash reserve ratio, the RBI aims to increase credit creation in the economy, stimulate economic growth, boost investment and business expansion, and support priority sectors. This policy measure is a part of the RBI's efforts to manage and regulate the country's monetary system to achieve its objectives of monetary stability and economic development.