Belgian long-term interest rate falls

Belgium's long-term interest rate continues to fall. By Tuesday night the interest the Belgian state had to pay to borrow money on the international markets for ten years had fallen to 5.32%. The spread - the difference with what Germany has to pay - has fallen to below 300 base points.

Last week this key interest rate nearly reached 6%, but already on Monday Belgium's long-term interest rate fell by 0.3%. On Tuesday a further 0.2% fall followed. The money markets are thus giving a positive response to the budget agreement reached by the six parties forming the new Belgian Government at the weekend.

Belgium's latest state bond, a financial product also aimed at small investors, is doing well too. Some 2 billion euros has already been raised. Investors have until 2 December to register. The 5-year bond that has a 4% yield before tax is popular, but analysts have pointed out that given the recent hike in Belgian interest rates a higher yield can be obtained by purchasing a similar product on the secondary market.