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Three charts that explain why India is in trouble

As India's rupee languishes near record lows against the dollar, analysts say weakness in Asia's third largest economy highlights why the rupee is one of the most heavily sold emerging market currencies.

The Indian rupee has slumped almost 17 percent against the dollar this year, making it the world's worst performing major currency.

Here are three charts to explain why India is in trouble:

Current account deficit

India's wide current account deficit (the broadest measure of the trade balance), which stood at $18.1 billion in the first quarter of the year, is cited by analysts as the chief reason for why the rupee is bearing the brunt of the sell-off in emerging market currencies.

Foreign investment outflows

To support the massive current account deficit, India needs steady inflows of capital into its markets from abroad.

But as investors anticipate the unwinding of U.S. monetary stimulus, investors have fled Indian markets, putting downward pressure on the rupee and making it harder for the government to finance the current account deficit.

Economic growth slows

Slowing economic growth is not helping the outlook for the rupee, say strategists.

India's economy grew 5.5 percent in the second quarter, languishing near its slowest in three years.

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