Spain's borrowing rates drop again in debt auction

Spain's borrowing rates drop again in debt auction

Unions demonstrate in front of Madrid's town hall, against the last government cutbacks, in Madrid, Monday, Dec. 17, 2012. The €39.5 billion ($51.3 billion) in bailout funds approved by European authorities for the country's troubled banks has arrived to Spain last week and the government has been forced to pass unpopular austerity measures. Banner reads 'PP Dangerous Party'. (AP Photo/Daniel Ochoa de Olza)

MADRID (AP) -- Spain's borrowing rates have dropped again, with the Treasury easily selling €3.5 billion ($4.63 billion) in short-term debt as investor concerns over the country's finances ease.

The Treasury sold €1.95 billion in six-month bills Tuesday at an average interest rate of 1.61 percent, down from 1.67 percent in the last such auction Nov. 27. It also sold €1.58 billion in three-month bills at a rate of 1.19 percent, down from 1.25 percent last month.

Demand was close to three times the amount offered overall.

Spain's borrowing costs have dropped from unsustainable highs earlier this year after the European Central Bank pledged to help troubled countries such as Spain by buying up their short-term bonds if they apply for aid.