The average cut-offs were increasing by 11 basis points to 7.84 per cent at Monday's auction, almost wiping off the decline in the last week's auctions. The average cost dropped by 17 bps basis points to 7.73 per cent last week to hit a nine-week low and a rise in tenor last week. At the latest auction of State Development Loans SDLs states market borrowings are known, both the yields as well as tenors went up, according to Aditi Nayar, chief economist at Icra Ratings. Last week's decline was the steepest this year. Since the beginning of this fiscal, states have been paying much higher rates for their market borrowings with the average yields sniffing at the 8 percentage-mark for many weeks. The yields on central government bonds have declined this week due to falling international crude prices and the fall in the US yields last week. Eight states raised Rs 13,800 crore, 13 per cent higher than the indicated level, wherein the weighted average cut-off also rose by 11 bps to 7.84 per cent at Monday's auctions of SDLs. The spread between 10 year SDLs and G-secs government securities yields was slashed to 40 bps from 45 bps last week. The average tenor of borrowing went up to 14 years from 13 years last week. The yield on the benchmark 10 year central government bonds G-secs 2032 climbed by 15 bps to 7.35 per cent from 7.20 per cent last week, reflecting the rising interest rate scenario. On August 5th, the Monetary Policy Committee of RBI increased the repo rate by 50 bps in a second consecutive hike in its bi-monthly rate revision, as part of its effort to rein in inflationary expectations, which suggests another rate hike in the upcoming review, Nayar said. The weighted average cut-off of the 10 year SDLs went up to 7.75 per cent from 7.64 per cent last week. The spread between the average 10 year SDLs and 10 year G-secs yield decreased to 40 bps from 45 bps. Borrowings went up as Gujarati Rs 2,000 crore and Telangana borrowed Rs 3,000 crore at the latest auction despite not having indicated their participation in the auction calendar for this week. Himachal, Kerala, Maharashtra, Meghalaya and Nagaland did not participate in the auction, even though they had indicated a combined borrowing of Rs 5,400 crore. The latest issuance was nearly 14 per cent higher than the year-ago level, but the cumulative issuance of Rs 1,98, 000 crore by 22 states so far is 9 per cent less than the year-ago level and the actual issuance is 30 per cent less than the indicated level of Rs 2,82, 100 crore.