Coronavirus impact: Centre's borrowing won't be cheap this time

The prospect of cheap borrowing is fading fast for the government, which will hold an auction of Rs 19,000 crore on Thursday, this fiscal year.
 

Wary of supply, bond dealers asked for sharp increase in rates from state governments during Wednesday’s auction. States borrowed at 150-200 basis points (bps) above government securities (G-Secs), or more than 450 bps above the policy repo rate, to raise money from the markets.
 

The ‘AAA’-rated public sector unit REC even withdrew a planned debt sale of Rs 5,000 crore. Kerala paid 8.96 per cent for a 15-year bond. The equivalent tenor G-Sec closed at