Italy raised €7.5 billion in one-year bonds at a sharply lower rate than in the last similar sale according to the Bank of Italy.
The rate on the 12-month bonds was 2.697% compared to 3.972% in an auction on June 13. Demand for the bonds was €11.596 billion.
The short-term bond auction was a key test for Prime Minister Mario Monti.
Earlier this week he refused to exclude the possibility that Italy might eventually have to rely on European assistance to help lower its borrowing costs.
