Welcome to the 182nd edition of The Pattern, a weekly where we dive into the latest from the world of economy, finance and technology. Let’s get started!  

The RBI cut rates today — a neat, expected 25 bps move. Normally, that would have been the headline. But this time, that headline was stolen by something else entirely: 
the rupee slipped to an all-time low at almost the exact same moment. 

If you follow markets, this pairing feels off. A rate cut usually signals comfort. A falling currency signals stress. So how can both things be true at once? 
 
But this overlap is exactly what makes the moment interesting. It’s not that one caused the other. It’s that the two stories reveal where the economy is moving on two very different fronts. 

Let’s break it down without overcomplicating it. 
 
What pushed the rupee down 
Across reporting, the explanations for the rupee’s slide are consistent. Weak foreign inflows kept coming up in market commentary, along with steady dollar demand from importers — the kind of background pressure that chips away at the currency over time. 

And in the forward market, traders were already pricing a weakening bias even before the policy announcement. That tells us the direction wasn’t new; it was simply becoming more visible  

So, the currency move wasn’t about the rate cut at all. It was already sliding well before the policy came out. 

Meanwhile, the domestic story looked very different 
The case for a rate cut came entirely from internal data: soft inflation, stable growth, and a comfortable policy environment. Nothing in the MPC discussions suggested concern about financial stability or external risk. The message was straightforward -- the RBI believes the domestic situation is strong enough to support slightly easier conditions.  

That’s why the overlap with the rupee move shouldn’t be read as a contradiction. 
It’s more like watching two timelines unfold at once: 

• The domestic timeline, where things look relatively comfortable. 

• The external timeline, where the rupee has been under pressure from flow-related factors for weeks. 
   

These are different stories, and they don’t always move in sync. 

What the RBI did do about the currency 
The RBI didn’t address the rupee through policy — and according to Reuters, it’s not aggressively defending it in the market either. The central bank is said to be “tolerating a weaker rupee” and stepping in only when moves get disorderly. In other words, the rupee may keep drifting until external conditions improve; the RBI’s role right now is simply to make sure the slide doesn’t turn into a spiral. 
 

What this all means for 2026 

The rupee didn’t fall because of the rate cut, and it didn’t ignore it either — those narratives just don’t fit. The real story is much simpler: 

• The rate cut reflects confidence in the domestic outlook. 

• The rupee’s fall reflects external pressures that were already in play. 

• The RBI’s interventions show it’s willing to manage both without letting one derail the other. 

Two different signals, one central bank, and a balancing act that’s likely to define early 2026. 

Reading list 

• Rupee’s journey from 80 per dollar to 90 in 5 charts – the role of trade, FDI, and RBI 

• Machine learning fuels credit boom in India as 93% of lenders claims higher approvals: Report 

• Credit card customer complaints spike 20% in FY25, pvt banks log most cases 

• Soaring growth puts India’s central bank in tough spot 

That’s is all for this week. I’ll see you next time. 
 
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Cheers,

Mayank