Loans

Rome, Italy (AHN) – Italy’s borrowing rate came down slightly at its latest bond auction, but still remained high with investors worried over the eurozone debt crisis.

Interest rates on 10-year bonds dropped by only 0.5 percentage points from the yield prices on debt auctioned in November. However, economists said that the important thing was that there were still buyers willing to invest in Italy’s government bonds.

The Italian government auctioned off $8.96 billion worth of medium and long-term debt on Thursday with interest rates of 6.98 percent on 10-year bonds.

There was better news for the costs of short and medium-term borrowing with interest on new three-year debt falling to 5.62 percent from 7.89 percent paid last month. It auctioned $11.8 billion of short-term debt on Wednesday.

It will have to auction more bonds to raise enough money within the next few months to repay $208 billion in debt between February and April.

It does not help that the euro has lost value. After the auction, the euro fell in value in currency pair trading to its lowest level against the dollar in 15 month at $1.287 before rising to end at $1.29 on Thursday.

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