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Greece to auction short-term debt

Greece is to auction 3.125 billion euro (£2.45 billion) in short-term debt to help pay off a 3.2 billion euro (£2.5 billion) bond repayment due on August 20.

The Public Debt Management Agency said the auction for 13-week T-bills would be held on August 14.

The decision allows Greece to avoid having to seek emergency funding on top of the bailout loans it receives from the European Union (EU) and International Monetary Fund (IMF).

The 3.2 billion euro (£2.5 billion) bond that matures on August 20 is held by the European Central Bank.

Near-bankrupt Greece has been relying on emergency loans since May 2010 after being frozen out of long-term debt markets but has maintained a market presence with regular treasury bill auctions of 13 and 26-week money.

The August 14 auction would be the largest since the country requested emergency assistance.

Greece's new coalition government, elected in June, can only receive additional rescue loans after officials from its bailout creditors, the EU and the IMF, have finished analysing its public finances.

The government must first provide the officials details of a new austerity package worth 11.5 billion euro (£9 billion) for 2013-2014 to slash its budget deficit. The assessment is expected in September.

Greece's last 13-week T-bill auction, held last month, raised two billion euro (£1.57 billion), at an interest rate of 4.28 %, and was 2.12 times oversubscribed.

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