LISBON, Portugal – Portuguese stocks are up and its borrowing costs have fallen after the country's political crisis was defused with a decision by the president to allow the fragile coalition to remain in charge.
Shares on Lisbon's PSI 20 exchange rose 2.3 percent Monday morning while the interest rate on the benchmark 10-year bond fell 0.27 percentage points to 6.46 percent.
Investors got a boost of confidence after President Anibal Cavaco Silva late Sunday ruled out early elections. Cavaco Silva says the best option for Portugal is for the coalition to remain in power. The coalition nearly fractured July 2 when Foreign Minister Paulo Portas threatened to resign.
Silva on Sunday approved a solution of naming Portas deputy to Prime Minister Pedro Passos Coelho.