UAE Central Bank Says to Buy Portuguese Debt

The governor of the United Arab Emirates central bank said Friday it intends to buy the sovereign debt of bailed-out eurozone member Portugal.

"Portugal has taken steps towards recovery. Ireland has successfully overcome the crisis and now the second country to do it in Europe will be Portugal," Sultan bin Nasser al-Suwaidi was quoted as saying in the Portuguese business daily Diario Economico.

"We therefore have the intention to buy Portuguese sovereign debt."

Portugal in May 2011 became the third eurozone nation to be tripped up by the debt crisis and seek a sovereign bailout. It received a 78-billion-euro rescue from the EU and IMF after pledging to cut its deficit and implement structural reforms to increase competitiveness.

"I am confident that Europe will overcome the financial crisis," said Suwaidi, who talked with the newspaper on the sidelines of a conference in the United Arab Emirates.

He added that "like Portugal, Italy is also on the right track."

In a sign of rising investor confidence in Portugal, the yield on its two-year bonds recently dipped below 4.0 percent on the secondary market.

A number of Portuguese companies have also tapped the bond market in recent months.