Portugal bond rate eases after snap polls rejected

Portugal's 10-year borrowing rate eased Monday, after the bailed-out country's president gave his backing to the ruling coalition and rejected calls for snap elections to end a political crisis. At 0755 GMT, the yield on Portuguese bonds trading on the open market dipped to 6.670 percent from 6.799 percent at close on Friday evening. "In Portugal, after the president's declaration this weekend, the risk of early elections has fallen, and calm should return to the markets for Portuguese debt," said analysts at investment group Aurel BGC. Portugal plunged into a political crisis when two key ministers, including finance minister Vitor Gaspar resigned early this month. The turmoil threatened to derail the government's bid to overhaul its finances under a 78-billion euro rescue plan agreed with the European Union and the International Monetary Fund. It also pushed the country's borrowing rates to above the critical level of eight percent. But on Sunday, Portuguese President Anibal Cavaco Silva said it was in the country's interest to keep the current government in power, and that elections were "not a solution for the problems Portugal is facing". Cavaco Silva has a largely ceremonial role, but his backing for the coalition is important because the president has the power to call elections.