India’s currency, the rupee, has fallen to two-year lows, taking related exchange traded funds (ETFs) along with it.

The rupee was knocked down by losses in stocks after worries about problems in the global financial sector as well as heavy demand for the U.S. dollar, Reuters reports. Meanwhile, Indian shares fell more than 3% today, to their lowest close in two months as investors braced themselves for more fallout from the latest in the U.S. financial crisis.

In better news, inflation fell for a third consecutive week last week – a signal that the Central Bank’s three interest rate increases are serving their purpose. Kartik Goyal for Bloomberg reports that wholesale prices rose 12.1% during the last week in August. India’s industrial output for July rose 6.5% from the year before, consistent with a slowing economy and high inflation and interest rates.

Reuters reports that while the numbers are positive, they’re still consistent with a slowing economy. According the one economist’s view, the bottom has not yet been reached.

• PowerShares India (PIN), down 26% since March 5 inception
• WisdomTree India Earnings (EPI), down 30.8% since Feb. 26 inception
• Market Vectors Rupee/USD ETN (INR), down 9.1% since March 18 inception
• WisdomTree Dreyfus Indian Rupee (ICN), down 4.5% since May 22 inception

Tags: Asia, Currency ETFs, Emerging Markets, EPI, ICN, India, Indian Rupee, INR, PIN, Sector ETFs