Greek short-term bond yields jump on central bank chief's warning

Short-term Greek bonds got pummeled after the head of the country's central bank warned that excessive delays in reaching an agreement with its creditors could lead to renewed funding pressures on Athens.

The country's bailout had reached a critical phase, Greek central bank governor Yannis Stournaras reportedly said.

If the impasse between the IMF, the European Commission and Athens was not resolved by the end of February the economy faced further deterioration as well as a hit to its financial system.

As a result, by 1509 GMT the yield on the benchmark two-year Greek government bond was higher by 74 basis points to 9.19%.

Some investors were worried that a failure to reach a deal on what measures Athens needed to take to receive the next tranche of its third bailout programme before the next elections in various European countries might see it risk a default in summer.

Athens was already facing multiple debt repayments over the next few months, with a large €7.0bn redemption falling due in July.

Over the previous weekend, EC president Jean Claude Juncker laid the blame at the door of the International Monetary Fund, saying the Washington-based lender had not yet decided on its position on whether to participate in further aid for the Greeks.

Also at the weekend, Greek Prime Minister Alexis Tsipras took aim at his creditors saying: "We are ready to discuss anything within the framework of the (bailout) agreement and within reason, but not things beyond the framework of the agreement and beyond reason."

"We will not discuss demands which are not backed up by logic and by numbers."