India’s exasperated currency

IT IS an unnerving collection of symptoms: a fast-growing Asian economy with a big public-sector deficit, a widening trade gap and a slumping currency. India's rupee, which had been steady for more than a year, has dropped by nearly 5% against the dollar since early April (see chart). The Reserve Bank, India's central bank, seems worried. It has spent an estimated $1 billion-2 billion to shore the rupee up since April, and on July 21st it raised interest rates by a full percentage point.