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Indian rupee has worst month in two decades

After falling to an all-time low earlier this week, the Indian rupee finished August with its worst month since 1992.
Posted By GABRIELLE LEVY, UPI.com   |   Aug. 30, 2013 at 11:38 AM   |   Comments

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Aug. 30 (UPI) -- After falling to an all-time low earlier this week, the Indian rupee finished August with its worst month since 1992.

Investors reacted to concerns of the deepening economic slowdown, as oil prices surged and uncertainty over the crisis in Syria rippled throughout the region.

The rupee fell 8.1 percent in August, down to 65.7050 per dollar, the biggest drop since March of 1992. At its worst, the rupee hit an all-time low 68.8450 on the dollar on Wednesday.

Growth on the quarter slowed to its weakest since 2009, increasing pressure on Prime Minister Manmohan Singh to take more drastic measures to turn around the slide of Asia's third-largest economy.

Singh defended his economic record, saying just hours before the release of the quarterly GDP numbers that "the fundamentals of the Indian economy continue to be strong," despite "a difficult economic situation."

Last year, the parliament lifted restrictions on direct foreign investment, but economists say the country needs to implement even greater structural reforms to jumpstart growth.

“The government is going to struggle to turn around the economy until it gets the deficit, consumer-price inflation and the exchange rate under control,” said Prasanna Ananthasubramanian, an economist at ICICI Securities Primary Dealership Ltd. in Mumbai. “This may take some time, and growth is at risk in the meantime.”

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