Latest News | States Borrowing Cost Begins to Ease; Falls 7 Bps

Mumbai, Jan 16 (PTI) Lower supplies for the second consecutive week finally led to the coupons on state debt to fall from the two-year high at the latest auction held on Tuesday, and the weighted average cut-off eased by 7 bps to 7.65 per cent.

For the past two weeks, despite poor supplies states were forced to offer very high returns, which had touched 7.72 per cent last week, the highest in the past two years.

Also Read | Flight Delayed or Cancelled Due to Fog? Know About Rights and How to Get Full Refund.

Nine states raised Rs 19,200 crore by selling state government securities on Tuesday, 32 per cent lower than the amount indicated for this week in the auction calendar.

Following this and the dip in the core-CPI inflation, the weighted average cut-off dipped to 7.65 per cent from a high 7.72 per cent last week, despite the weighted average tenor increasing to 16 years from 11, Icra Ratings chief economist Aditi Nayar said in a note.

Also Read | Army Day (India) 2024 Date, History and Significance: Know About the Day When KM Cariappa Became the First Indian Commander-in-Chief of the Army.

Moreover, she said the spread between the cut-off of the 10-year state bonds and the 10-year benchmark G-sec yield declined to 50 bps from 54 bps last week.

So far this year, the states have drawn down Rs 6.57 lakh crore from the market, 35.8 per cent more than the year-ago period, when they had auctioned debt worth Rs 4.84 lakh crore.

(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)