Italy’s cost of borrowing reaches new high
THE COST of Italian borrowing hit new highs today when the yield on five-year bonds hit 6.47pc in an auction that raised €3bn.
This compares with 6.29pc last month which was a record high at the time.
In response to market pressure, Italy is limiting the amount of money it is trying to raise but it has a €440bn gross target for next year.
In addition, the euro fell to a one-year low against the dollar after the auction.
The currency fell below $1.31 yesterday for the first time since January and to $1.3020 today after it dropped overnight.
The fall came after a report that Germany is opposed to raising the limit on the bailout fund – the European Stability Mechanism.