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LISBON. — Portugal placed 1,25 billion euros in short-term debt yesterday but at sharply higher rates amid disagreement with creditors over deficit cutting targets.It sold 750 million euros in 18-month treasury bills at a rate of return to investors of 2,293 percent, compared with a yield of 1,603 percent at the previous auction on June 19.

The Portuguese Treasury also sold 500 million euros in three-month bills at a rate of 1,081 percent, up from 0,766 percent in the previous auction on August 21.

“The rise is not a surprise as it is in line with current market rates for these terms of debt,” said Filipe Silva, a bond strategist at Banco Carregosa, referring to a rise in global bond yields as investors anticipate a reduction in US monetary stimulus.

Auditors from the International Monetary Fund, the European Commission and the European Central Bank are currently in Lisbon to review Portugal’s progress under its 78-billion-euro bailout and whether to release a 5,5-billion-euro loan instalment.

Portuguese government officials have called for easing the country’s 2014 public deficit reduction target from 4.0 percent to 4,5 percent of GDP, which the troika of lenders have already indicated they will turn down.

While Portugal’s economy has finally begun growing again, the government coalition has had trouble getting austerity measures past the country’s top court and nearly fell apart itself over public opposition to the tax increases and spending and wage cuts.

Portugal’s long-term borrowing costs have risen to levels near which it was forced to seek international aid two years ago, and there are increasing concerns whether it will be able to borrow affordably on the market when the bailout programme ends next year.

The yield on Portuguese government 10-year bonds stood at 7,15 percent yesterday. — AFP.