Higher govt borrowing would drain liquidity in the market and increase borrowing cost.
Mumbai: Companies are rushing to raise debt ahead of the Union Budget expecting the government to expand its market borrowing plan that would push up their funding cost. HDFC, LIC Housing Finance, Bajaj Finance, L&T Infrastructure Finance and REC are among borrowers that seek to sell bonds worth up to Rs 23,100 crore Monday on the electronic bidding platform,
“Chances of rate cuts are slim with elevated retail inflation,” Jhaveri said. Retail inflation for December 2019 spiked to 7.35%, the fastest since July 2014 and bringing the benign rate trajectory to a halt. In 2019, the RBI slashed the policy rate by 135 basis points even as lenders lagged behind to pass on the benefit to consumers.