Spain attracts solid demand for €2.9bn three-month bills
Published 24/08/2011 | 05:00
SPAIN'S Treasury enjoyed a bit of good news yesterday after it saw solid demand for a short-term Treasury-bill sale, which was supported by the ECB's bond-buying programme.
Average yields on the three-month bill were at their lowest levels since March at 1.36pc, though a long way above yields of around 0.3pc paid before the eurozone debt crisis began. Spain sold €2.9bn of bills, near the maximum target of €3bn.
Prime Minister Jose Luis Rodriguez Zapatero said the recent rise in the spreads of Spanish sovereign debt against German debt -- which reached euro-era highs of over 400 basis points before the ECB bond-buying plan began on August 8 -- were not justified.
He added that Spain's economy was growing despite the extreme market volatility but the turbulence threatens to prolong the country's own crisis.
Spain plans to put a constitutional cap on public debt before elections in November. (Bloomberg)