Latest News | Despite Near Record Supply, States Borrowing Cost Dips Marginally
Get latest articles and stories on Latest News at LatestLY. As many as 12 states raised Rs 32,600 crore at the weekly auction of government securities on Tuesday at an average price of 7.68 per cent, down by 2 basis points over last week, making it the second largest auction in the quarter.
Mumbai, Mar 14 (PTI) As many as 12 states raised Rs 32,600 crore at the weekly auction of government securities on Tuesday at an average price of 7.68 per cent, down by 2 basis points over last week, making it the second largest auction in the quarter.
Aditi Nayar, the chief economist and head of research at Icra Ratings, said the drawdown is a sharp 24 per cent more than indicated in the quarterly borrowing calendar. Additionally, the drawdown is more than double the year-ago level.
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Yet the weighted average cut-off eased by 2 bps to 7.68 per cent, with the weighted average tenor declining mildly to 15 years from 16. But the spread between the 10-year state bonds and the similar Central government bond yields rose to 34 bps from 30 bps last week.
As the fiscal year is closing, the states can have only two more weekly debt auctions.
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At Tuesday's auction, 12 states borrowed Rs 32,600 crore as against and indicated Rs 26,200 crore taking the total borrowings so far this fiscal to Rs 6,81,500 crore, which 5 per cent more than last the similar period last fiscal when it was Rs 6,49,200 crore, and 138.8 per cent more than year ago drawdown when they raised only Rs 13,600 crore. Nayar said.
(The above story is verified and authored by Press Trust of India (PTI) staff. PTI, India’s premier news agency, employs more than 400 journalists and 500 stringers to cover almost every district and small town in India.. The views appearing in the above post do not reflect the opinions of LatestLY)