While you were sleeping, the Reserve Bank of India cut interest rates.

The RBI took its benchmark policy rate to 6.75% from 7.25%, a larger-than-expected cut that comes as inflation has cooled off and, as the RBI said in its announcement, "global growth has moderated, especially in emerging market economies (EMEs), global trade has deteriorated further, and downside risks to growth have increased."

This marked the 706th time a global central bank cut interest rates since the Federal Reserve last raised its benchmark rate.

And while this rate cut is interesting for a few reasons — namely that India has been one of the world economy's bright spots over the past couple of years as growth in China has slowed while more developed economies in the US, the UK, and the euro area have seen just tepid growth — the biggest thing to note is just who is calling the shots at the RBI: Raghuram Rajan.

Raghuram Rajan, governor of the Reserve Bank of India. Shailesh Andrade/Reuters Rajan, a big name in economics but hardly a household name outside that world, bears very close watching as we approach what many are beginning to argue is something like an inflection point for the global economy.

Back in 2005, Rajan, then with the International Monetary Fund, gave a legendary speech at the Kansas City Fed's Jackson Hole symposium in which he identified precisely the issues that would plague the world's financial system three years later. Namely, liquidity.

Rajan's assessment of the banking system more or less outlined exactly what would bring down Lehman Brothers and nearly take down the entire financial system. He saw that banks had shifted their liabilities around but retained the most illiquid, the most opaque, and the riskiest slices of the transactions they undertook in pursuit of near-term profits.

"Every generation of investment managers finds a new way to goose up returns for seemingly no additional risk," Rajan said in 2005, "only to reconfirm the old adage: There is no return without risk."

Rajan was at the forefront of identifying the risks created by policies undertaken over the final decades of the 20th century, and he now leads one of the more interesting central banks. His own bank's policy actions, then, bear close watching.

In its policy statement on Tuesday, the RBI's commentary around emerging markets is most interesting and important to note as these economies have felt the brunt of the impact from a slowing Chinese economy and a strengthening US dollar.

"[Emerging market economies] are caught in a vortex of slowing global trade volumes, depressed commodity prices, weakening currencies and capital outflows, which is accentuating country-specific domestic constraints," the RBI wrote.

The RBI continued:

China's intended rebalancing from investment towards consumption is being hit by the stock market meltdown, slower industrial production and weaker exports. The devaluation of the renminbi on August 11, while mild, has unsettled financial markets across the world. Brazil and Russia are grappling with recession and runaway inflation, while South Africa is facing tightening structural constraints which threaten to tip it into a downturn.

Since the Chinese devaluation, equity prices, commodities and currencies have fallen sharply. Capital flight from EMEs into mature bond markets has pushed down developed market yields, and risk spreads across asset classes have widened. Although volatility ebbed in early September and capital flows returned cautiously to some EMEs, sentiment in financial markets remains fragile.

And so in short, things are not looking good for emerging markets.

As the RBI outlines, emerging markets were formerly bolstered by strong exports from the twin tailwinds of a weaker US dollar and higher commodity prices, two trends that have reversed.

And not only does this reversal hurt emerging markets given a static situation — which would assume that investors keep their money in these countries — but with money now leaving these markets for (comparatively) greener pastures like the US, they are also dealing with capital flight.

Again, the RBI called this a "vortex" for a reason. And India, though it's the world's ninth-largest economy, is still an emerging economy and subject to these capital-flight risks.

So Rajan sees the flow of money in some of the global economy's more celebrated, but still fragile, arenas up close, and he isn't exactly thrilled with what is going down.