Italy raised €12.25 billion in an auction of short-term bonds today at lower rates than before, indicating an easing of market tensions for the recession-hit economy.
The rate on the six-month bonds was 1.202% compared to 1.969% in the last similar auction on January 27 and well below the level of over 6% reached in November at the height of investor panic over Italy.
The auction included €8.75 billion in six-month bonds and €3.5 billion in bonds due in 295 days, the Bank of Italy said. The amount raised was higher than the maximum expected due to high demand for the debt.
The Treasury will return to the debt markets tomorrow with an auction of medium- and long-term debt at the start of a busy year in which Italy needs to raise a total of €450 billion to keep public finances ticking over.
Borrowing costs have fallen sharply since former Eurocrat Mario Monti replaced Silvio Berlusconi as prime minister in November and began implementing harsh austerity measures as well as advocating deeper reforms to the economy. Italy is labouring under a €1.9 trillion mountain debt - equivalent to around 120% of its gross domestic product.
