This site uses cookies to improve your experience and to provide services and advertising. By continuing to browse, you agree to the use of cookies described in our Cookies Policy. You may change your settings at any time but this may impact on the functionality of the site. To learn more see our Cookies Policy.
#Open journalism No news is bad news

Your contributions will help us continue to deliver the stories that are important to you

Support The Journal
Dublin: 16 °C Saturday 4 July, 2020

Bond markets unmoved by €6bn budget package

The cost of Irish borrowing remains largely flat in spite of the government’s Budget announcements.

Image: Bloomberg

THE COST OF BORROWING for the Irish government has remained largely flat this afternoon, with international investors apparently unmoved by yesterday’s announcement that €6bn of adjustments would be sought in next month’s Budget.

The rate of interest being asked of Ireland for ten-year borrowings remains close to its all-time record, standing at 7.618% shortly before 3pm this afternoon.

The price had briefly spiked this morning, momentarily exceeding 7.7%, but has fallen away since and now stands modestly under its opening value from this morning of 7.656%.

The modest fall has, however, reduced the Irish-German spread, with the cost of German ten-year borrowing rising moderately too, to 2.419% – which, in tandem with the small Irish gains, leaves the spread at a still-extraordinary 5.2%.

The Irish rises this morning followed the similar rise in Spanish bonds, as investors briefly feared fiscal difficulties in the largest of the beleaguered ‘PIIGS’ economies.

A Spanish default would almost certainly mean that were Ireland to follow, there would be significantly less cash in the European stability funds for Ireland to live off.

  • Share on Facebook
  • Email this article

About the author:

Gavan Reilly

Read next: