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.
OK
Dublin: 5 °C Thursday 20 February, 2020
Advertisement

Cost of government borrowing reaches lowest level since bailout

Interest on a 9-year Irish bond – the benchmark bond currently in circulation – has fallen below 5 per cent.

Image: Remy de la Mauviniere/AP

THE INTEREST RATE that the Irish government would be asked to pay for long-term loans has fallen to its lowest level since Ireland entered its EU-IMF bailout.

The ‘yield’ (or interest rate) on Irish nine-year bonds being traded on the second-hand markets has this morning fallen to below 5 per cent – its lowest since September 2010.

That month was the last time before the bailout that Ireland issued a new batch of long-term loans – when it paid investors an average interest rate of 4.7 per cent in exchange for €1.5 billion in ten-year loans.

The cost of shorter-term loans has also fallen: a two-year loan to Ireland has fallen below 2 per cent, having stood at over 10 per cent last November.

Ireland hopes to be able to re-enter the bond markets on a full-time basis early next year, before the last of the €67.5 billion loan fund from the EU and IMF is exhausted.

Read: Everything you wanted to know about the bond markets but were too afraid to ask

  • Share on Facebook
  • Email this article
  •  

About the author:

Gavan Reilly

Read next:

COMMENTS (25)