States' market borrowing set to get costlier; SDL yields rise 24 bps

States will find it costlier to raise money from the bond market, following the Centre’s offer on Thursday. States were told by the Centre to borrow from the market, amid the shortfall in GST revenues.

Yield on the 10-year state government paper (called state development loans or SDL) has risen 24 basis points (bps) so far in August, to 6.66-6.68 per cent. Yields on the three-year SDLs have jumped 35 bps to 5.09 per cent this month. Treasury and bond dealers said that while this surge was more due to the rise in yields on inflation concerns, there could be