Cut off yields Ease by 7-8 bps at State bond auction as Borrowings

Published on June 22, 2022
Current Context: The yields on 10-year state development loans (SDL) eased by 7-8 basis points while amounts raised by state governments continued to be lower than the indicative calendar.
Cut off yields Ease by 7-8 bps at State bond auction as Borrowings
  • As per RBI data the cut-off yield for 10-year SDL at 7.86-88% as against 7.94-95%.
  • Apart from that states raised Rs 6,500 crore through SDLs on June 21, 2022, nearly 60% lower than the indicated amount.
  • The total Rs 90,700 crore raised by 16 state governments/Union Territory (UT) raised s in Q1 FY2023, is nearly 47% lower than the indicated Rs. 1.7 trillion.
  • Besides ICRA has released one more report on borrowing in which it was stated that Year-on-Year basis, the borrowings are 26.8% lower than the year-ago level.

Question:

Q.1 As per the recent circular of RBI the cut-off yields for 10-year are maintained at _________ basis points?
a. 6-7 basis points
b. 7-8 basis points
c. 10-11 basis points
d. 5-6 basis points

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