Germany borrows at rock-bottom costs
FRANKFURT, Germany (AP) — Germany borrowed at almost no cost Wednesday when it sold €5 billion in two-year treasury notes at a rock-bottom interest rate.
The average interest rate — or yield — at the auction turned out to be 0.07 percent. The bond also carried a coupon — an interest rate given for holding on to the bond rather than selling it on — of zero per cent.
The low yield reflects Germany's status as a safe haven from the eurozone's government debt crisis. Investors are willing to accept very low returns on their money in return for feeling sure they will be paid back. With eurozone inflation at 2.6 percent, that means they are essentially paying Germany to lend it money.