The Core Report #745 Markets Recover On A Rate Cut
Dec 7, 2025
Dharmakirti Joshi, Chief Economist at Crisil, shares insights on macroeconomic trends, particularly surrounding recent RBI rate cuts. He explains how low inflation prompted the RBI's decision and discusses the implications for borrowing costs. The conversation also touches on India's transition from coal and the broader impacts of the rate cut on currency and capital flows. Additionally, Joshi offers a historic context for India's repo rate, while exploring what data to monitor as we approach year-end. A must-listen for market enthusiasts!
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Founders' Feud Shaped IndiGo's Story
- Govindraj Ethiraj recounts the founders' split at IndiGo and how Rakesh Gangwal publicly accused Rahul Bhatia of running the airline like a fiefdom.
- The episode highlights Gangwal's gradual exit and the company's governance questions after operational failures around pilot duty-time limits.
Rate Cut Fueled A Narrow Market Rally
- Markets rose after the RBI cut the repo rate by 25 basis points to 5.25% and revised growth and inflation forecasts favorably.
- However, mid and small cap indices lagged, signaling a narrow rally that leaves many retail investors exposed.
Rupee Allowed To Find Its Level
- The RBI is allowing the rupee to weaken and will intervene only to curb sharp volatility rather than defend a level.
- A softer rupee provides a buffer against tariff shocks but reflects broader capital flow pressures and external headwinds.