States Continue To Pay High Coupon On Debt At 7.72%
Nine states raised Rs 19,300 crore from the market selling government securities, which was 34% lower than the amount indicated for this week in the auction calendar.
The weighted average rates of state debt continued to remain at an over two-year high of 7.72% at the second weekly auction of the quarter on Tuesday, making it the highest so far this fiscal.
Accordingly, the spread between 10-year state bonds and benchmark G-sec yield also remained firm at 54 bps, with both inching up by 1 bps from the previous week, according to a note by Icra Ratings' chief economist Aditi Nayar.
Nine states raised Rs 19,300 crore from the market selling government securities, which was 34% lower than the amount indicated for this week in the auction calendar.
Despite lower supply, the weighted average cut-off inched up to 7.72%, which is the highest so far in FY24 from 7.71% last week.
The payout increased in spite of the weighted average tenor remaining unchanged at 11 years.
Both this had the spread between the cut-off of the 10-year state bonds and the 10-year benchmark G-sec yield inching up to 54 bps from 53 bps last week, which again is the highest so far this fiscal. Both the rates are also at an over two-year high.
Cumulatively, the state borrowed Rs 6.4 lakh crore from the market so far this fiscal, which is 34% more than they had raised a year ago at Rs 4.8 lakh crore, according to Nayar.
