Greece's short-term debt rates drop after bond issue

Greece's short-term borrowing costs tumbled on Tuesday, days after the crisis-hit country returned to medium-term international bond markets for the first time for four years.

Athens paid 2.75 percent interest on 1.625 billion euros ($2.24 billion) on its latest issue of three-month treasuries, according to its public debt management agency (PDMA).

That was the first time the yield on Greece's debt has fallen below 3.0 percent since the start of the financial crisis, which plunged the country into six years of crippling recession.

Tuesday's sale also shows a sharp drop since 18 March, when Athens issued short-term debt to raise 1.3 billion euros at 3.1 percent interest.

It comes days after Greece sold its first international medium-maturity bonds since it was forced to seek a bailout from the EU and IMF to avoid defaulting on its debts.

Greece on Thursday raised 3.0 billion euros with five-year bonds at under 5.0 percent in a move hailed by European leaders as proof that its economy is finally on the mend, and by analysts as a sign that the eurozone debt crisis is failing.

The Greek government expects the country to return to growth this year from a recession which has slashed the country's gross domestic product by a quarter and sent the unemployment rate soaring to 28 percent.