Italy's borrowing costs have more than doubled in a pair of bond auctions amid new market uncertainty about its debt and growth prospects.
Italy easily sold (EURO)8 billion ($10.5 billion) in 12-month bonds on Wednesday, but the interest rate investors demanded rose to 2.84 percent from 1.40 percent last month. The government also sold (EURO)3 billion in three-month bonds, with the borrowing costs rising to 1.25 percent from 0.49 percent.
Italy's borrowing rates had eased in recent months after the European Central Bank gave the financial sector emergency loans and the technical government of Mario Monti implemented austerity measures.
But uncertainty has returned to Europe, pushing borrowing rates higher, particularly in Spain. In the secondary market, where issued bonds are traded openly, Italy's 10-year bond yield was at 5.55 percent, up from around 5.0 percent last week.
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