ROME - Italy has seen its costs of borrowing drop in a sale of one-year Treasury bonds.
Interest rates dropped from 2.735 per cent to 2.23 per cent in Monday's auction. Italy put €8.5 billion ($11.21 billion) of 12-month bonds up for auction. Demand slightly outstripped the offer.
Also auctioned were €3.5 billion ($4.62 billion) in bonds maturing on June 21. Rates on those dipped from 1.644 per cent to 1.546 per cent.
The third auction this year tested market sentiment on the country's handling of its debt since ratings agencies cut in their credit ratings last month. Italy's government, led by economist Mario Monti, is battling the budget deficit with austerity cuts and new taxes amid a stagnant economy.