Ireland sells debt at negative yields for the first time
The Government is being paid for the first time to borrow on the markets.
Ireland has joined the club of countries that are seen as safe places to park money by investors, and can therefore borrow money and so-called negative interest yields.
It means investors are prepared to lose money in order to hold Irish government debt. The National Treasury Management Agency (NTMA) borrowed €500m for six months on the markets yesterday at a yield of -0.01pc.
Total bids received amounted to €1.97bn. The State's debt management agency said this was 3.93 times the amount on offer.
It's good news for the State which is basically getting money for free, but negative yields are also a sign of economic stagnation, reflecting investors lack of faith in economic growth.
Indeed, the global economic think tank the Organisation for Economic Cooperation and Development earlier this week expressed concern about ultra-low interest rates in the global economy.
It said that while it is both expected and desired to have low interest rates when many central banks are dealing with below target inflation, the extent of the decline in some cases appears to be "flashing a warning signal".
Countries cited by the Paris-based body in terms of negative yields on three year debt included Denmark, Japan, Switzerland, Sweden, Germany, France, Austria, Belgium and the Netherlands.
The Bank of International Settlements has also cited similar concerns. It has warned that a low inflation, negative bond yields and very low interest rates could push economic and political stability to breaking point if they continue to fall.
The European Central Bank will try to avoid incurring losses from its new bond-buying programme by focusing on longer-dated paper where yields are not yet negative, governing council member Ewald Nowotny was quoted as saying on Wednesday.