The borrowing cost for states fell to 7.44% in the debt auction, lower than the two-year high of 7.8% in January. This decline is attributed to the interim Union Budget and the fiscal deficit target. Issuance trailing, limited supply, and falling interest rates contributed to the decrease. The weighted average tenor increased, while the spread between cut-off rates declined.
Despite lower supply, the weighted average cut-off inched up to 7.72 per cent, which is the highest so far in FY24 from 7.71 per cent last week. The payout increased in spite of the weighted average tenor remaining unchanged at 11 years.
Get latest articles and stories on Latest News at LatestLY. The weighted average rates of state debt continued to remain at an over two-year high of 7.72 per cent at the second weekly auction of the quarter on Tuesday, making it the highest so far this fiscal. Latest News | States Continue to Pay High Coupon on Debt at 7.72 Pc.