Ireland Effectively Closed Out of Bond Markets
November 4th, 2010Via: Breaking News Ireland:
As Ireland’s cost of borrowing continues to soar, an analyst has today warned that the bond markets are now effectively closed to Ireland.
The interest being sought on 10-year Irish bonds today is creeping towards 8%.
Although the country is not currently borrowing money, analyst Paul Somerville says that the increasing rate displays a lack of confidence in the markets that Ireland will be able to take the necessary action to deal with its deficit.
“Ireland has been shut out of the bond markets now,” said Somerville.
“The bond markets have lost absolute, all faith in the Irish Government.
“Basically, if the rates are at this level when we try to go back to the markets some time at the end of January/February, we will be going straight into the (EU) stability fund.
“It has gotten that serious today.”
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More: Dump
Via: AP:
Ireland’s finances came under intensifying pressure Thursday as the government — fighting to keep its majority and avoid an election — prepared to unveil a 2011 budget-cut figure billed as the biggest in Irish history.
Investors again dumped Irish bonds, reflecting their skepticism that Ireland can rapidly reverse its huge budget deficit without driving its economy deeper into recession.
The interest-rate premium demanded by investors to buy Ireland’s depreciating bonds has doubled in two months and reached a new modern high again Thursday, jumping to 7.7 percent versus 7.45 percent a day earlier.
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