London - AFP
Portugal raised 854 million euros ($1.2 billion) for three months on Wednesday but had to pay an increased rate of 4.959 percent, sources in the debt market said. The debt management agency had set a target of raising 750 million to one billion euros. Demand was 2.2 times the amount of bonds on offer. On August 17, Portugal had raised 985 million euros in three-month debt at a rate of 4.854 percent. This latest operation took place amid continuing nervousness about signs of slowing growth in the global economy and the ability of the eurozone to put its debt crisis behind it. "For now, the country has managed to finance itself with rates below five percent," Carregosa Bank analyst Filipe Silva told AFP. "Portugal continues to attract investors ready to assume risk, but only in the short term," Silva said. In May, Portugal began a 78-billion-euro rescue programme agreed by the European Union and the International Monetary Fund in return for vast economic reform and austerity cuts. Silva said the yields achieved today "don't yet reflect" the austerity measures. Portugal, the third eurozone country after Greece and Ireland to have received a bailout package, no longer raises long-term debt on the markets as borrowing prices are too high. Portuguese finance minister Vitor Gaspar said on Tuesday that Portugal would return to the markets by 2013 once the country had passed this "financial emergency". Last week, the EU agreed to provide Portugal with the next instalment of 11.5 billion euros as part of its bailout, citing progress in the country's austerity measures. Brussels said Portugal was "meeting important programme milestones" and demonstrating commitment to addressing "underlying weaknesses" in public finances, the financial sector and competitiveness.