Mumbai: For the first time in the third quarter, the cost of state debt soared past the 7 percentage points levels with the weighted average cost settling at 7.01 per cent, up 16 bps over the past week, at the auctions held on Tuesday.
The weighted average cut-off of state debt auction hardened by 16 bps to 7.01 per cent with rise in cut-offs across tenors. Similarly, the spread between the 10-year state debt and G-sec rose to 50 bps from 47 bps in the last auction, Aditi Nayar, the chief economist at Icra Ratings said. The rating agency attributed the hardened rates to the sharp 46 per cent higher-than-indicated demand for the week at Rs 15,100 crore, which comes after a gap of seven auctions.