IRISH borrowing costs have plummeted to record lows as the markets threw their weight behind the historic debt deal.
The cost of borrowing money for two years on the international markets has fallen to 1.2pc – levels last seen in the 1990s.
That’s a record low since Ireland scrapped the punt and signed up to the euro.
The cost to the State of borrowing money for five years also fell for a fourth day yesterday, hitting the lowest levels since 2005.
In Brussels, Taoiseach Enda Kenny said he would look for another deal to ease the country’s bank debt burden. Mr Kenny said European leaders wanted “a success story” of a country getting out of a bailout.
“And Ireland can be that country,” he said while cautioning that a deal was unlikely before the end of the year.
That agreement would be on top of Thursday’s, which saw the Government strike a deal which will reduce borrowing by €20bn over the next decade and give the Coalition an extra €1bn to play with between now and 2015.
Economists and analysts here and overseas said the deal was good for Ireland but cautioned that the country still faces formidable problems. Rating agency Fitch hailed this week's deal, saying it was a "positive surprise" but warned that the country still faces economic hardship and a troubled banking sector.
Fitch added that the agreement to replace the promissory notes reduces the pressure on the Government's finances and makes Ireland's public finances more transparent. Many investors have stayed away from Ireland because the Government's finances were too difficult to understand.
"Lower cash-flow financing needs and greater transparency can add to the positive momentum behind Ireland's push to regain full bond market access," Fitch analyst Gergely Kiss said.
Central Bank governor Patrick Honohan warned in a speech last night that the Government will still have to introduce serious budget cuts and tax increases despite the promissory note deal.
Mr Honohan, who was a key player in securing this week's deal, added that the promissory notes linked to Anglo Irish Bank had been handed back to the Central Bank yesterday evening.
Tanaiste Eamon Gilmore said that the positive reaction of the markets had been more important than the response of the rating agencies.
"It's a great boost of confidence. The Irish people have endured a lot of hardship over the past number of years. We are now seeing our way out of that," he said.
Borrowing costs for other countries in trouble such as Portugal and Spain also fell yesterday as investors bet that the European Central Bank will also bend rules to help them too.
While Portugal's costs have fallen, it must still pay almost twice what Ireland has to pay while Spain has to pay about 50pc more.
The low cost of borrowing is down to renewed faith in Ireland's economic future and low interest rates, as central banks slash borrowing costs to levels not seen for decades to shore up the world economy. The Bank of England has cut rates to the lowest levels since it was founded in 1694.
However, Irish rates are still much higher than most eurozone countries.
Finance Minister Michael Noonan welcomed the news that borrowing costs on the international debt markets had fallen for the fourth day, saying it was the "best news of the night", adding that the rating agencies would soon upgrade Ireland's status which is at, or close to, junk at present.
Goodbody Stockbrokers economist Juliet Tennent also welcomed the agreement, saying: "The probability is that the sovereign (government bonds) will be in a position to regain full market access and exit the bailout successfully at the end of the year."
Meanwhile, the Irish Congress of Trade Unions (ICTU) is going ahead with bank-debt protests across the country today. The General Secretary of the Irish National Teachers' Organisation, Sheila Nunan, said public services would need to "see some benefit" from the Anglo bank deal.
WHEN Fine Gael and Labour came into office two years ago, I said we might not get a very good government but we would get some kind of government – something that was lacking in the latter days of Bertie Ahern's tenure and the brief and unhappy reign of Brian Cowen.