The worst is not yet over for rupee, global headwinds to inflict more pain

The currency dropped to a record 71.5750 per dollar on Tuesday

India’s rupee owes its tag of Asia’s worst-performing currency this year to the selloff sweeping emerging markets. There’s more pain in store from beyond its borders.

While foreign currency debt has zoomed, various external vulnerability indicators paint a rather mixed picture, according to the Reserve Bank of India’s annual report. Indeed, data due as early as next week will probably show the nation’s current-account deficit widened in the June quarter to 2.6 per cent of gross domestic product, the highest in 4 1/2 years.

The widening in the gap is the weakest spot for Asia’s third-largest economy and one of the reasons