Indian companies may find it a lot harder to raise short-term funds via commercial paper (CP), according to analysts.
Companies will have to spend more to raise funds via CPs due to tighter liquidity norms, and government borrowings with similar tenure will also increase, according to analysts quoted in a Reuters report.
Short-term rates, which have been increasing since last year, have already hit their highest level in over four years as the liquidity deficit in the banking system is seen widening and the government has stepped up borrowing via treasury bills at the end of the financial year.
