The Indian rupee depreciated to an all-time low of 83.2 per USD due to increased capital outflows following the recent CPI report and its potential repercussions on the central bank’s policy. Consumer inflation hit a 7.4% YoY peak in July, surpassing the bank’s 6% upper limit. The heightened inflation metrics have spurred concerns over the possibility of a sustained hawkish policy stance, potentially triggering a selloff in rupee-backed stocks and amplifying capital outflows despite heightened interest rates. Market participants are now keenly watching for any FX intervention actions by the RBI to stem further rupee losses, in line with trends since the third quarter of 2022.