India's inflation rose unexpectedly in August to a six-month-high, data showed Monday, adding to challenges confronting the new central bank chief, who is already grappling with a slowing economy and a weak currency.
The euphoria which greeted new central bank governor Raghuram Rajan has been unprecedented in India's normally sober financial world but the honeymoon may be shortlived.
It would be an understatement to say Raghuram Rajan has a plate of challenges as the new head of the Reserve Bank of India. He comes into the new job as India's economy has become a collection of superlatives: weakest level for the rupee, lowest growth rate in four years and a record high current account deficit.
India's manufacturing shrank in August for the first time in over four years, dealing a fresh blow to efforts to boost a slumping currency, as rival China's factory activity rebounded, figures showed Monday.
The rupee slid back towards a record low on Friday, with investors braced for a statement on the state of economy from Prime Minister Manmohan Singh and the release of data that was expected to show India in the grip of a protracted slowdown.
The Indian rupee slumped to a record low near 69 to the dollar on Wednesday on growing worries that foreign investors will continue to sell out of a country facing stiff economic challenges and volatile global markets.
The Indian rupee hit a record low and shares slumped on Tuesday after parliament's approval of a US$20 billion plan to provide cheap grain to the poor renewed doubts about the government's resolve to control spending ahead of elections due next year.
India's rupee hit a new all-time low against the dollar on Tuesday on continuing fears that recent measures to stabilize the currency and kick-start the flagging economy will not work.
Indian policymakers are looking increasingly panicky as they battle the worst currency crisis in more than two decades, and more worryingly there is no sign their remedies are working.
As India's next central bank chief, economist Raghuram Rajan will next month walk into a job that his predecessors have described as "lonely" and "thankless."