Italy's 1-yr debt costs fall to lowest since January

MILAN, April 10 Wed Apr 10, 2013 5:17am EDT

MILAN, April 10 (Reuters) - Italy's one-year borrowing costs fell to the lowest level since January at an auction on Wednesday, with some investors betting on a euro zone interest rate cut in the coming months while chances of an early economic recovery in the region are fading.

Rome sold 8 billion euros ($10.5 billion) of one-year bills paying a rate of 0.92 percent, much lower than a yield of 1.28 percent paid at a mid-March sale.

Italian borrowing costs have now fallen back to levels seen before an inconclusive end-February election that has so far prevented the country from forming a new government.

Rome also sold 3 billion euros of three-month bills at a yield of 0.24 percent. The treasury last sold three-month bills in October 2012, paying a rate of 0.77 percent.

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