(FT.com) -- Moody's, the ratings agency, on Monday downgraded Ireland's government bond ratings because of the country's deteriorating public finances.
The downgrade of one notch to Aa2 puts Moody's rating on the same level as Standard & Poor's, which rates Irish debt at AA, and one notch higher than Fitch, which gives the country's bonds an AA minus rating.
Irish 10-year bond yields, which have an inverse relationship with prices, rose 8 basis points to 5.51 per cent, the highest level since the end of June. The cost to insure Irish debt against default rose by 10bp to 261. The country's stock markets fell by about one per cent.
However, the euro and other European bond markets remained stable.
The action comes ahead of the planned auction of Irish government bonds on Tuesday. The country plans to issue €1.5bn ($1.9bn) in six-year and 10-year bonds.
Analysts said the action was not a surprise, given the country's weak public finances and financial sector.
CNN
