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Irish Republic set for bond sale Irish bond sale raises 1.5bn euros
(40 minutes later)
The Irish Republic faces a crucial bond auction which will give an indication of investor confidence in the country's economy. The Irish Republic has raised 1.5bn euros ($1.96bn; £1.26bn) through an auction of government bonds.
The government is seeking to raise 1.5bn euros ($1.96bn; £1.26bn) through the sale of four and eight-year bonds. The sale of four and eight-year bonds was seen as a crucial test of investor confidence in the country's economy.
There have been reports that the country may have difficulty raising funds and need a bail-out from the International Monetary Fund (IMF). The National Treasury Management Agency said the four-year bonds attracted bids five times the amount on offer.
But the Irish central bank and finance ministry have played down these fears. Separately, Spain also raised just over 7bn euros through a bond issue while Greece said its debt issue was heavily subscribed as it raised 300m euros.
"The results confirm that today's [Irish] auction was successful, as we had expected, and that investors' appetite for Irish government bonds has remained strong despite the market volatility of recent weeks and market panic about the country's public finances, reflected in the recent rise of borrowing costs," commented Sonia Pangusion of IHS Global Insight.
The country's borrowing costs have risen on fears that weak economic growth and the cost of bailing out its banks will push the economy into a debt crisis.
'Alarmist commentary'
Both the Irish central bank and finance ministry have played down fears that the country may need a bail-out from the International Monetary Fund (IMF).
On Monday, central bank governor Patrick Honohan hit out at the "alarmist commentary" regarding the country's economy.On Monday, central bank governor Patrick Honohan hit out at the "alarmist commentary" regarding the country's economy.
He said the government had already taken "prompt and painful" steps to deal with its deficit.He said the government had already taken "prompt and painful" steps to deal with its deficit.
"It has kept to the targets it set for net budgetary savings in 2009 and 2010. If the economy stays close to the track originally envisaged, the deficit would come close to 3% (of total economic output) by 2014," he said."It has kept to the targets it set for net budgetary savings in 2009 and 2010. If the economy stays close to the track originally envisaged, the deficit would come close to 3% (of total economic output) by 2014," he said.
The country's borrowing costs have risen on fears that the cost of bailing out its banks and weak economic growth will push the economy into a debt crisis. Following the bond sale, IHS's Sonia Pangusion said: "The results also indicate that the markets somehow overreacted to the recent rumours that the International Monetary Fund is advancing towards Ireland."