Portuguese bond yields soar to record heights

Jan 27, 2012, 12:39 GMT

Lisbon - Portuguese bond yields kept going up Friday amid market fears that the country could become the next victim of the eurozone debt crisis.

Yields for 10-year bonds rose to 14.83 per cent, from 14.80 per cent on Thursday, according to the Portuguese news agency Lusa.

Yields for 5-year bonds also went up. Lusa reported the two types of bonds were hitting record levels.

Portugal has come under heavy market pressure this week. Analysts attribute it to ratings agency Standard & Poor's recently downgrading Portugal's credit rating to junk level.

There is also concern over Portugal's weak economic prospects, with the economy expected to shrink by about 3 per cent this year, and over a possible contagion from Greece's financial problems.

Prime Minister Pedro Passos Coelho said Tuesday that his country will not need a second bailout from the European Union and the International Monetary Fund.

Lisbon has already received about 40 billion euros (52 billion dollars) from the two institutions, which granted it loans worth 78 billion euros in May.