ECONOMY

Greece raises 1.6 bln euros in short term debt sale

Greece raised on Tuesday 1.62 billion euros in short-term debt at a marginally higher interest rate than at a similar debt auction last month.

The auction of 26-week treasury bills had an interest rate of 4.88 percent, slightly above the 4.80 percent at a sale in April, the Public Debt Management Agency (PDMA) said.

The agency had originally been seeking to raise 1.25 billion euros, but borrowed more as investor interest was strong – although slightly weaker than at the April 12 auction.

Tuesday’s sale was 3.58 times oversubscribed, compared with 3.81 times in April.

Foreigners are believed to have bought 34.2 percent of the issue.

Meanwhile, Greek government bonds rose on Tuesday.

The gains pushed the yield on the two-year note down by the most in a week.

?The reason behind the rise in Greek bonds is the rumor about a discussion for another bailout package,? Alessandro Giansanti, a senior rates strategist at ING Groep NV in Amsterdam, told Bloomberg.

?It?s temporary good news for Greece and even for the other peripherals. We will have a short-term rally but it will not change the bigger picture.?

The Greek two-year yield dropped 83 basis points to 24.78 percent after declining by as much as 95 basis points, the most since May 3. The 10-year bond yield fell 30 basis points to 15.41 percent.

German bonds fell as stock-market gains reduced demand for safety amid speculation the European Central Bank will judge that the region?s economy is able to withstand higher interest rates.