Will high government borrowing drive up interest rates further?

Yes jyoti it will definitely cause for drive up further interest rate ..

 Government borrowing have a bearing on interest rates, but the intensity will depend on the fund requirements of the private sector. Heavy capex spending is expected from many companies in the coming days and government will also be going for more market exposure. Crowding out effect, will have a say and rates are expected to get dearer in the coming days.

Again, tackling inflation and ensuring borrowing cost doesn’t thwart economic growth will be challenging.

Excesive govt. borrowings can cause an externality calle crowding out where by govt borrowing depletes the credit available for private investments with banks driving up the interest rates.

Moreover, the present situation world over is due to low interest rates and chepa credit hence, which our govt. may be aware like others and can maintain a high interest rate policy to avoid such breakdowns further.

Cheap credits were created to support the leisure class and the consequences are visible. Presidient Regan can be considered as a benefactor for the leisure class by brininging in this phenomenon of chepa credit. Now world over the policy has to shift towards accomodating higher interest rates in which case too the rates can go up.