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Italy's borrowing costs drop as it sells 6.5B euros in 1-year bonds despite political upheaval

Italy has easily sold €6.5 billion ($8.45 billion) in 12-month bonds at lower interest rates despite uncertainty about its political and financial future.

The Italian Treasury reported Wednesday that the yield, or interest rate, on the bonds was 1.46 percent, down from the 1.76 percent paid in the last such offer in November. Demand was 1.94 times the amount on offer.

Italy's political foundations have been rocked by Premier Mario Monti's surprise decision over the weekend to resign after Silvio Berlusconi's party yanked its support.

Wednesday's bond auction was the first since the upheaval, which has forced Italy's general elections to be held in February, several weeks ahead of schedule.

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