States' borrowing cost rises to 7.49%, coupon rate highest in 16 weeks

States' borrowing cost rose as they offered a coupon rate of 7.49 per cent for the securities sold in auction on Monday.

The coupon rate is the highest in the past 16 weeks, according to an analysis by Icra Ratings.

Nine states together raised Rs 13,200 crore from selling government securities in the auction held on Monday.

While the amount mopped up was 4 per cent lower than the indicated amount for the week in the auction calendar, the funds were raised at a higher cost, as per the analysis.

The weighted average cut-off coupon rate rose to 7.49 per cent, up 4 basis points from 7.45 per cent in the auction last week.

The rate rose in spite of the fact that the weighted average tenor dipped to 13 years from 15 years, the analysis showed.