November 15, 2018 / 9:40 AM / 6 months ago

Foreign holdings of Italian bonds in August fall to lowest in more than 4 yrs

MILAN, Nov 15 (Reuters) - Italian government bonds held by foreign investors fell to 656.839 billion euros ($743.74 billion) in August, their lowest level since March 2014, central bank data showed on Thursday.

International investors have been reducing their exposure to Italy since an anti-establishment coalition took shape in May and went on to form a government in June, clashing with European Commission over plans to ramp up public spending and unwinding past deficit-curbing reforms.

Totalling over 2.3 trillion euros, Italy’s debt runs at more than 1.3 times the national output, making the country vulnerable to rising borrowing costs.

Based on Reuters calculations, foreigners held 33.3 percent of Italian government bonds in August, down from 33.8 percent the previous month.

The figure includes certain purchases carried out by the European Central Bank under its bond-buying programme and holdings of resident investors through foreign vehicles, which account for around 9-10 percent of the total. ($1 = 0.8832 euros) (Reporting by Giulio Piovaccari and Sara Rossi; editing by Agnieszka Flak)

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