Spain’s Borrowing Costs Soar

In what has become an all-too-familiar pattern for debt-ridden Eurozone countries, Spain’s borrowing costs shot up dramatically in the most recent Treasury auction. Just days after electing a conservative government pledging to address the nation’s deteriorating credit outlook, bond yields on 3-month bills rose from 2.3 percent to 5.1 percent.

Despite the yield increase, demand was deemed to be strong with €2.98 billion ($4 billion) in 3- and 6-month bills, successfully auctioned. Last week Spain had to offer an average interest rate of nearly 7 per cent on 10-year bonds at an auction, a euro-era record.

Source: The Associated Press

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