Ireland’s cost of borrowing hits new high

THE fallout from the banking crisis pushed Ireland’s cost of borrowing to new highs yesterday as the interest rate on 10-year bonds rose to 3.89% above German rates.

Investors continue to demand higher risk premium on money they lend to Ireland, Greece, and Spain due to the perceived risk they could default on their debts.

As a result, the cost of 10-year Irish bonds hit new historic highs, peaking at 3.89% above 10-year German bond rates. The 10-year yield was 6.03% by late afternoon.