India 10-Year Yields and Rupee – A Long-Term SetupThe Bond Yield Story
India’s 10-year government bond yield has been moving inside a long contracting triangle for more than 20 years.
The highs are getting lower.
The lows are getting higher.
Yields are now sitting near the middle, around 6.5%.
This triangle will not last forever. When it breaks, the move can be strong and last for years.
If yields break down: Bond prices go up, borrowing gets cheaper.
If yields break up: Borrowing costs rise, pressure builds on companies and the government.
The Rupee Story
The USD/INR chart shows a very clear uptrend since 2011 .
Every dip has made a higher low.
The line of support is still holding.
Today the rupee is near ₹88 per USD .
This means the rupee has been slowly losing value for many years.
Weak rupee: Imports (oil, gold, electronics) become costlier → inflation risk.
But: Exporters like IT and pharma get some advantage.
Fiscal Pressure
As per a Reuters update on TradingView’s news feed, the GST Council has approved tax cuts on many consumer goods starting September 22, 2025 .
This could boost consumption.
But it may also lead to a large revenue shortfall for the government.
Implication for markets:
Bond yields: More government borrowing could push yields higher.
Rupee: Fiscal stress may keep INR weak against USD.
(source : in.tradingview.com
)
Big Picture
Bond yields are stuck inside a long contracting triangle – a breakout is coming.
The rupee has been in a steady downtrend – the pressure is clear.
Fiscal moves like GST tax cuts add extra risk , tilting towards higher yields and weaker INR.
In short: The charts show yields coiling and rupee sliding . Fundamentals only add more weight to this setup.
Disclaimer: This analysis is for educational purposes only and does not constitute investment advice. Please do your own research (DYOR) before making any trading decisions.
