Portugal raises €1 billion as 10-year interest rate returns to pre-pandemic levels

Portugal’s debt management agency (IGCP)  returned on Wednesday to the debt markets and raised €1 billion, with the country’s 10-year government bond interest rate falling to pre-pandemic levels.

IGCP raised €686 million through a 10-year bond and will pay an interest rate of 0.314%, the lowest since September 2019 (0.264%). In the previous comparable auction, held last June, the interest stood at 0.397%.

On the other hand, €314 million were also raised in bonds maturing in 2037, and the interest rate of 0.622% represents an increase compared to previous auctions (0.609% in July).

It was a return of the IGCP to debt markets, after a four-month “interregnum” (the previous operation happened in July), and takes place at a time of political and governmental impasse in the country and when investors are reluctant with the evolution of the European Central Bank’s (ECB) monetary policy in the context of high inflation.