The average cut-off increased by 11 basis points to 7.84 per cent at Monday's auction, nearly wiping off the decline in the last week's auctions. The average cost fell 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, both the yields and tenors increased, according to Aditi Nayar, chief economist at Icra Ratings Last week's decline was the steepest this year so far this year. Since the beginning of this fiscal, states have been paying much higher for their market borrowings with the average yields hitting the 8 percentage-mark for many weeks. The yields on central government bonds have also 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 increased 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 slowed 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 went up by 15 bps to 7.35 per cent from 7.20 per cent last week, reflecting the rising interest rate scenario. The Monetary Policy Committee of RBI increased the repo rate by 50 bps on August 5 in a second consecutive hike in its bi-monthly rate revision, as part of its effort to rein in inflation expectations, which suggests another rate hike in the upcoming review, Nayar said. The weighted average cut-off of the 10 year SDLs also went up to 7.75 per cent from 7.64 per cent last week. The spread between the weighted average 10 year SDLs and 10 year G-secs yield decreased to 40 bps from 45 bps. Borrowings rose at the latest auction as Gujarati Rs 2,000 crore and Telangana borrowed Rs 3,000 crore, despite not specifying their participation in the auction calendar for this week. Even though they had indicated a combined borrowing of Rs 5,400 crore, Himachal, Kerala, Maharashtra, Meghalaya and Nagaland did not participate in the auction. The latest issuance was almost 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 so far is 30 per cent less than the indicated level of Rs 2,82, 100 crore.