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Spain's midterm borrowing costs hit new high

07-20-2012 01:45 BJT

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Spain's mid-term borrowing costs have hit new euro-era highs at an auction, as investors remain unconvinced that Madrid can control its finances.

Spain sold 3 billion euros of three different bonds, at the top end of its targeted range, though demand was softer than previous auctions, and yields jumped on all three bonds.

The interest rate on the benchmark five-year bond rose sharply to 6.46 percent. The figure is close to the key psychological mark of seven percent considered unsustainable in the medium term. Thursday's auction came as Parliament debated a package of (sales tax hikes) and civil (servant pay cuts) that have triggered daily protests.

Spain has already raised more than 65 percent of its original medium- and long-term debt target of 85 billion euros for the year. However, a new deficit target and a central government promise to help the country's struggling regions means the gross target is expected to increase by more than 20 billion euros, adding to pressure on the year's remaining bond auctions.

Editor:Zhang Jianfeng |Source: CNTV.CN

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