State completes 99% of borrowing

IRELAND has now completed 99% of its stated €20 billion borrowing programme for this year, following the raising of a further €1.5bn through the eighth successful monthly Government bond auction of 2010.

Last month’s auction had seen a near 1% increase (from 4.72% to 5.54%) in the yield — or interest rate demanded by bond investors — on 10-year Irish securities and the yield between those and German bunds rose further last week mainly on uncertainty over how much the Government’s bailout bill for Anglo Irish Bank might rise to.

It was against that backdrop that the NTMA ventured into yesterday’s auction. As Dermot O’Leary, chief economist with Goodbody Stockbrokers, noted on Monday that the latest auction was less about funding this year’s budget deficit and more about the price at which the money is being borrowed.