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ā¢ The spread between government bond yields and AAA-rated corporate bond yields has increased over the past year-and-a-half, leading to higher borrowing costs for companies.
ā¢ The spread for 5-year and 10-year AAA corporate bonds has increased significantly from just 1 bps and 6 bps, respectively, at the end of April 2022.
ā¢ The rise in borrowing costs is due to the Reserve Bank of India's actions to raise interest rates and drain excess liquidity from the banking system.