During Monday’s Asian session, the Indian rupee touched a record low of 57.54 against the U.S. dollar, trading below the previous record low of 57.32 seen almost exactly a year ago. Things got worse, not better, as the session went along. At this writing shortly after 2:15 AM Eastern time, the rupee traded at almost 57.75 against the dollar and that should have at least one ETF on traders’ minds when U.S. markets open Monday.

The WisdomTree Indian Rupee Fund (NYSEArca: ICN) is the obvious candidate as the one ETF focus on the Indian currency. News of the rupee’s record lows against the greenback come as ICN is already down 2.8% year-to-date. However, those losses have been accelerating in recent weeks as the ETF is down 4.7% in the past month. [ETF Spotlight: India]

The rupee’s dramatic decline comes as Asia’s third-largest economy is grappling with slowing economic growth and a tenuous grasp on its investment-grade credit rating. Rupee weakness could also foil plans by the Reserve Bank of India to continue lowering interest rates to boost the economy. Analysts and traders will now watch for any possible intervention from the central Reserve Bank of India to stem any further weakening of the currency, according to Agence France-Presse.

In a more docile environment, weaker currencies would benefit plenty of emerging markets. Not India, which must import the bulk of its energy needs. As a currency falters, imports cost more, creating widening current account deficits for countries that import large amounts of raw materials, such as India.

India’s current account deficit is already at a record high and the situation is so dire that earlier this month, the country raised its import duties on gold and platinum to 8% each from 6%. Since India is one of the world’s largest gold consumers, a weak currency and higher taxes on bullion could discourage purchases of the yellow metal there, in turn weighing on gold-backed ETFs such as the SPDR Gold Shares (NYSEArca: GLD). [Gold ETFs Shed $45 Billion]

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