ECONOMY

Greece raises 1.6 bln euros in debt sale; demand solid

Greece raised 1.625 billion euros in a sale of six-month treasury bills on Tuesday that was met by solid demand as the interest rate moved marginally higher than in a similar debt auction last month.

The Public Debt Management Agency (PDMA) said the yield had risen to 4.8 percent from 4.75 percent offered in the last six-month bill sale in March.

“Total bids reached 4.758 billion euros and the amount finally accepted was 1.625 billion,» the agency said in a statement.

The auction had originally aimed to raise 1.25 billion euros. Local press reports said that foreign investors snapped up about 40 percent of the government paper sold.

The issue came as the Greek government is labouring to keep a draconian overhaul of the recession-hit economy on track, under pressure from the EU and the IMF which last year bailed out Athens with a 110-billion-euro loan.

The government had hoped progress on slashing the runaway Greek deficit would restore confidence in the economy and enable a return to borrowing markets with longer-term bonds later this year.

But the spread, or gap, between 10-year Greek bonds and German equivalents is still around 10 percentage points.