Italy's 2-yr borrowing costs fall to lowest since 1999

MILAN, April 24 Wed Apr 24, 2013 5:28am EDT

MILAN, April 24 (Reuters) - Italy's two-year debt costs fell on Wednesday to their lowest level since the launch of the European Monetary Union in 1999, as the country looked set to end two months of post-election deadlock.

Bets the European Central Bank could cut interest rates next month also fuelled a hunt for yield which was benefiting Italian and Spanish debt.

The treasury sold 2.5 billion euros of two-year zero-coupon bonds, paying a yield of 1.17 percent, much lower than the 1.75 percent Rome paid at a similar sale one month ago.

Rome issued also 0.75 billion euros of inflation-linked bonds maturing on September 2023, reaching the total top-planned amount of 3.25 billion euros.

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