States see drop in borrowing cost as bond yields soften after RBI policy

Borrowing cost for states eased after the Reserve Bank of India’s delivered a dovish policy last week which softened the bond yields.

In the auctions on Tuesday, states borrowed Rs 12,100 crore from the market compared with Rs 14,200 crore last week, with most of them opting for longer-term borrowing.

“Easing pressure on yields was seen. Cut-off yield for Andhra Pradesh was down to 7.13 per cent compared with 7.18 per cent in the auction held on January 4, 2022. Karnataka's yields were down to 7.16 per cent (14-year) and 7.12 per cent (15-year), from 7.35 per cent and 7.33