A trader in Frankfurt watches the announcement as all eyes were on ECB president Mario Draghi around Europe yesterday. Reuters

THE cost of Irish borrowing has fallen to for the first time in history as a combination of the economic recovery and the potential of the European Central Bank's bond buying programme took hold.

The yield - effectively the interest rate - on 10 year bonds fell to 0.979pc this morning.

While Ireland 's debt to GDP ratio is still very high, other aspects of the Irish economy are growing and unemployment levels are continuing to fall.

At the height of the economic crisis, bond yields spiked to nearly 14pc shutting us out of the debt markets.

Next month the ECB will begin buying €60bn of euro bonds per month in a bid to boost the flagging European economy.

Lower borrowing costs are a boon to the Government, because it means outstanding debts can be refinanced at a lower price on the markets.

It is already Government policy to replace expense IMF bailout loans with cheaper private sector debt.

Finance Minister Michael Noonan said the drop in borrowing costs is due to a combination of factors.

“We have the highest growth rates in Europe now and our unemployment is down significantly now,” the minister told Bloomberg TV, in an interview in London.

“All the national statistics are extraordinarily positive.

“As well as that there was contingent risk coming from Nama and the liquidation of the old Anglo Irish Bank. That’s all gone now. There’s a surplus predicted for both institutions as they work out.

And then we had the European advance. Mr Draghi’s quantitative easing certainly has helped. But also the start of the process for Greece yesterday, that has helped also. The movement is downward, but the movement on bond yields internationally is downward.”

Online Editors