Rupee Hammered as Malaise Hits India
Currency hit record low Thursday, down 27% from last July
By Mark Russell,  Newser Staff
Posted May 27, 2012 9:10 AM CDT
An Indian drinks tea at roadside shop in Siliguri on May 26, 2012. India's rupee sank to an all-time low against the dollar last week, despite likely intervention by the central bank.   (Getty Images)

(Newser) – Economic troubles in the United States. Troubles sweeping Europe. China isn't looking so hot. And add India to the growing list of economic basket cases. The rupee hit a record low of 56.4 rupees to the US dollar on Thursday before rebounding slightly, and is down 27% against the dollar since last July, hammering local stocks, stoking inflation, and putting more pressure on a weak economy, reports al-Jazeera. "The exchange rate problem that you are seeing is probably a bit of a bubble," said India's chief economic adviser. "I do think it's a bubble, but it's not an India-specific bubble. There is something global going on."

With India importing more than three-quarters of its oil, to the tune of $154 billion, and exports way down this year, the country's current account balance is taking a major battering. "India may not yet be heading towards a balance-of-payment crisis, but the macro-economic situation of the country is worsening by the day calling for almost emergent steps to ensure that no further damage is done to the economy," the Indian chamber of commerce tells the Economic Times.