Portugal placed 1,250 million euros (1410 million U.S. dollars) in 5 and 10 year treasury bills on Wednesday, Portugal's debt agency IGCP revealed, at lower interest rates than in previous comparable auctions.

The country placed 750 million euros in 10 year bonds at a rate of 2.851 percent, and 500 million euros in 5 year bonds at a rate of 1.198 percent.

Demand reached 1,507 million euros for 5-year bonds, 3.01 times higher than the amount placed, while demand for 10 year bonds was 1,456 million, 1.94 times the amount placed.

Portugal's economy has been slowly improving and the budget deficit narrowing, making the country one of the best performing euro zone bond markets this year.

However Portugal is still rated junk by Fitch Ratings, Moody's Investors Service and Standard & Poor's.