For the first time this fiscal, the weighted average cost of States’ market borrowings crossed the 7% mark at auctions held on Monday, with the average cut-off jumping by 12 bps to 7.02%.
The spike is surprising as seven of the nine States did not participate in the auctions after the States got the final tranche of the GST compensation last week, Icra chief economist Aditi Nayar said.
At 7.02%, the State developmental loan cut-off is the highest this fiscal.
This, despite the release of the final tranche of GST compensation loan of ₹44,000 crore on October 28, within weeks of the second tranche disbursal of ₹40,000 crore, the rating agency said.
Published - November 01, 2021 11:31 pm IST
