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Spain sees robust demand, pays sharply lower interest rates in short-term debt sale
MADRID (AP) Spain has raised 3.6 billion ($4.4 billion) in short-term debt at significantly lower interest rates in the first debt auction since the government announced a big new austerity package.
The Treasury sold 2.6 billion in 12-month bills at an average interest rate of 3.9 percent, down from 5.07 percent in the last such auction on June 19. It also sold 961 million in 18-month bills at a rate of 4.24 percent, down from 5.10 percent that same day.
Demand exceeded supply by more than two and nearly four times, respectively.
The auction was closely watched: it was the first since the government announced a 65 billion deficit-cutting austerity package last week. Spain's banks are being bailed out and the government is trying to avoid needing rescue aid itself.