Portugal pays lower rates in short-term bond auction

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The price of borrowing for Portugal fell slightly at a shoprt-term bond auction on Wednesday amid concern that the eurozone crisis may drag down Italy and Spain.

Portugal raised 750 million euros in three-month notes at a yield of 4.967 percent, slightly down from 4.982 percent for a similar issue in late July.

Demand exceeded the offer by 2.6 times, Portugal's public debt management agency said. The agency had intended to raise 500 million to 750 million euros.

The bond emission came as markets are increasingly concerned that Spain and Italy, may join Greece, Ireland and Portugal as eurozone countries in danger of facing unmanageable borrowing rates and in need of bailouts.

Portugal received a 78-billion-euro bailout from the European Union and International Monetary Fund earlier this year and agreed to stringent budget measures to scale back state spending.

Senior officials from the EU, IMF and European Central Bank are currently in Portugal evaluating the country's progress before deciding on the release of the next slice of funding under the rescue.

© 2011 AFP

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