Cooling of G-Sec yields to bring relief for states in this financial year

States can be now confident of seeing their bond issuance going through in this financial year in the light of the Centre reducing its borrowing programme and bond yields falling to reflect the sentiment.

On Tuesday, three states held back issuing their bonds worth Rs 34 billion, of the Rs 88.5 billion planned by nine states. Yields on central government bonds rose sharply that day following the comments of a Reserve Bank of India (RBI) deputy governor that lenders should not come to the apex bank for relaxations on their mark-to-market losses.

As a fallout, investors asked for steep rates