Interest rates down sharply as Spain sells $3.7 bln in short-term debt as bailout fears ease

Spain has sold €2.8 billion ($3.7 billion) in short-term bills and seen the interest rates it has to pay fall sharply.

The amount raised was more than target and provides further evidence that investors are growing less concerned over the country's economic future.

Spain's borrowing costs have dropped from unsustainable highs last year after the European Central Bank offered to help countries struggling with their debts if they apply for aid.

The Treasury said Tuesday it sold €1.21 billion in three-month bills at an average interest rate of 0.44 percent, down from 1.19 percent in the last such auction Dec. 18. And it sold €1.58 billion in six-month bills at 0.88 percent, compared with 1.61 percent last month.

It was recession-hit Spain fourth successful bond sale of the year.