Image caption Raghuram Rajan served as chief economic advisor to the government, working closely with the finance minister

India has picked a former International Monetary Fund chief economist as the head of its central bank, as it works to revive its slowing economy.

Raghuram Rajan, 50, takes up the top job at the Reserve Bank of India on 4 September.

The announcement came as the rupee hit a new record low against the US dollar on Tuesday.

Mr Rajan, who is known for having predicted the 2008 global financial crisis, will replace D Subbarao.

His appointment comes with the rupee in free-fall because of India's current account deficit, a broad measure of trade, and the economy growing at its slowest pace in 10 years.

Investors have been taking money out of the country because of slowing growth, and a slew of corruption scandals have left the political process paralysed.

Mr Rajan, who served as chief economic advisor to the government working closely with Finance Minister P Chidambaram, has said that "all options were on the table" to stabilise the currency.