The National Treasury Management Agency (NTMA) will hold a scheduled bond auction on October 9, when it will look to increase the size of bonds due in 2034 and 2055.
The deals will potentially bring the total borrowing this year to €8.25bn, of a €6bn to €10bn target.
It comes as the fall of the latest French government has sent a wave of uncertainty through European financial markets, pushing down the euro and sending French borrowing costs higher.
Ireland is now seen as among Europe’s least risky borrowers
Ireland’s budget surplus provides a cushion from volatility, although borrowing costs for new debt this year are now running at more than 3pc for the State – dramatically up from the 2021-2022 era of almost cost-free debt.
Ireland is now seen as among Europe’s least risky borrowers, however, so relative prices remain low.
France, on the other hand, is now drifting into real market challenges, after prime minister Sebastien Lecornu resigned before even having a chance to appoint a government.
Markets are watching closely to see whether the next step in France will be a snap election, with the far-right Rassemblement National (National Rally) likely to play a leading role in the next government if that happens.
Germany’s 10-year Bund yields, the bloc’s benchmark, rose two basis points (bps) to 2.72pc yesterday.
Germany’s two-year yields, more sensitive to expectations for European Central Bank policy rates, dropped 1.5 bps as low as 1.987pc, the lowest level since September 12.
German borrowing costs tend to fall when investors are nervous because demand for low-risk debt rises.
The gap between borrowing costs on safe-haven German Bunds and 10-year French government bonds rose at the same time to 87.96 bps, the highest level since January 13, on concerns about the French fiscal outlook.
French 30-year bond yields rose to 4.42pc.
Meanwhile, there was also a rise in Japan’s 30-year borrowing costs to a record high amid expectations of expansionary economic policies there under a new prime minister. Japan’s 30-year yields jumped to 3.28pc, after hitting a new record at 3.301pc.
Sanae Takaichi, who was poised to become Japan’s new prime minister, has been a vocal advocate of “Abenomics”, a hefty mix of government spending and monetary stimulus.
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