Average cost of government debt between states plunges 27bp to 6.72%

0

The weighted average cost of borrowing in states plunged 27 basis points to 6.72% from the previous week, but the weighted average yield on the most traded 10-year debt remained unchanged at 6.97% .

10-year government bond yields are at their highest since mid-August and track rising G-Sec yields since late September, heightening concerns about rising global energy prices and rising US Treasury yields, Care Rating chief economist Madan Sabnavis said in a note.

The average loan price is down this time to 6.72% because the average maturity fell to 9 years at today’s auction, Icra Rating said in a briefing note.

Likewise, the spread between 10-year government loans auctioned on Tuesday, when three states raised just 5,000 crore rupees, which is down 15% from the year’s level. last, and the primary market yield of the G- at 10 years. Sec was 64bp, 4bp lower than at the start of the month, according to the Care Rating report.

So far, state market borrowing for this fiscal year is 15% lower than in the corresponding period of FY21, as only 27 states and two UTs raised 3.48 lakh crore from Rs 4 Rs 10 lakh crore borrowed by 28 states and two UTs in the same period last fiscal year.

Borrowing to date is also 11 percent lower than shown in the auction schedule for this period.

States are becoming less and less indebted in the long term because many of them have a better situation of revenue in relation to the expenditure they undertake on the one hand and, on the other hand, many are those who draw on the financial accommodations provided by the RBI by means of special design facility and advancement of upper ways and means.

(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)

Dear reader,

Business Standard has always strived to provide up-to-date information and commentary on developments that matter to you and have broader political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these difficult times resulting from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative views and cutting edge commentary on relevant current issues.
However, we have a demand.

As we fight the economic impact of the pandemic, we need your support even more so that we can continue to provide you with more quality content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscriptions to our online content can only help us achieve the goals of providing you with even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital editor


Source link

Share.

Leave A Reply