The National Treasury Management Agency has successfully raised €500m in an auction of three-month treasury Bills.

The yield, or interest rate on the debt, is 1.8%.

It is the first time the NTMA has gone to the markets with a new issue of Government debt for almost two years.

Demand was high with bids to cover almost three times the amount of bills issued.

Taoiseach Enda Kenny said that it was a small step but a step in the right direction.

Minister for Finance Michael Noonan said that the markets were responding positively to Ireland's implementation of the troika programme and the 'Yes' vote in the recent fiscal treaty referendum.

Chief Executive of the NTMA John Corrigan has he was "pretty pleased" with how this morning's auction went.

The interest rate of 1.8% was significantly below what Spain recently sold similar debt for, he added.

He said the NTMA's primary dealers indicated that there had been good interest from money managers in continental Europe in today's auction.

The hour-long auction closed at 10.30am.

The Government said last week's EU summit decision on bank debt paved the way for today's auction.

The aim is to build on positive market sentiment towards the country, as reflected in the falling yields - or interest rates on Government debt.

Though still too high for a full return to the markets, Irish long-term bond yields and the cost of insuring them against default have fallen below comparable Spanish rates.

On RTÉ's Today with Pat Kenny, Peter Brown of the Irish Institute of Financial Trading, said the interest rate of 1.8% was slightly better than expected.

But he cautioned against reading too much into the success of today's sale.

He said it was an exercise in PR to show Ireland could raise money independently on the markets.

But he said the sort of traders that buy three-month treasury bills are totally different to the ones that buy five or ten-year bonds.