Rupee Slips, Yields Steady—Is India’s Market Calm Before a Global Storm?

India's financial markets opened muted on June 17, 2025, with the 10-year government bond yield (IN067934G=CC) holding at nearly the same at 6.3547%, from the previous close of 6.3584%. The muted movement is due to investors adopting a wait-and-watch strategy in the context of global rate uncertainty and domestic liquidity flows.

 

On the other side, the Indian rupee (INR=IN) started 0.1% down at 86.1750 per U.S. dollar from Friday's close of 86.08 due to dollar strength and volatility in oil prices putting pressure on emerging market currencies.

 

Key Highlights:

 

- Bond Market Stability: The 10-year benchmark yield is still range-bound, underpinned by RBI's expected accommodative policy and benign inflation expectation.

- Rupee Under Pressure: Rupee fall is caused by foreign fund outflows, import demand for the dollar, and geopolitical tensions that are impacting world risk appetite.

- Liquidity Expectations: Dovish sentiment and recent RBI purchases have served to anchor yields, although traders tread carefully ahead of U.S. Fed comments and crude prices.

- Macro Stability: Despite the rupee’s weakness, India’s forex reserves remain robust, and core economic indicators suggest continued resilience.

 

While global markets wait nervously for central bank signals and commodity fluctuations, India's bond and currency markets are walking a tightrope—between hope and fear.

 

Sources: Trading Economics, Investing.com, AInvest.