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Italy yields above 5 pct are sustainable-ECB's Visco

FRANKFURT, Oct 12 (Reuters) - Sovereign bond yields above 5 percent are sustainable for Italy though they are very costly and crimp growth, Bank of Italy chief Ignazio Visco said in comments released on Friday.

The yield on Italy's benchmark 10-year bonds is around 5 percent.

"Even more than 5 (percent) is sustainable for the country," Visco, a member of the European Central Bank's policymaking Governing Council, told CNN, when asked about sovereign bond yields.

"The problem is not whether it is sustainable but whether it is costly. So it is extremely costly, and the cost you see in the end in a lower rate of growth and there may be a spiral in that. But 5 percent is among the lowest rates Italy has had in many years."

"Relative to the growth rate it is high, but it is sustainable," he added.

(Reporting by Sakari Suoninen, writing by Paul Carrel)

((paul.carrel@thomsonreuters.com)(+49 69 7565 1313))

Keywords: ITALY DEBT/ECB