Spain has paid lower interest rates to raise (EURO)2 billion ($2.84 billion) in an auction of 3- and 6-month bills, indicating growing market confidence in the country's ability to handle its debt problems.
Investors demanded a 0.9 percent interest rate to take on (EURO)1.2 billion in 3-month bills from the Treasury on Tuesday. That average yield is down from 1.1 percent in the last such auction in February.
The Treasury sold (EURO)842,000 in 6-month bills at a rate of 1.3 percent, down from 1.6 percent last month.
Demand was more than four times the amount offered for the 3-month bills and more than 5 times that for the 6-month debt.
Spain's borrowing rates have dropped in recent bond auctions as market fears ease over whether it may need a bailout.