asked the Minister for Finance if he will state the total gross amount of sterling assets held by the Central Bank and the rate of interest which is received by the Central Bank in respect thereof.
Ceisteanna—Questions. Oral Answers. - Sterling Assets of Central Bank.
The gross external assets of the Central Bank amounted to £80.6 million on 20th March, 1951, and to £71.1 million on 17th July, 1951, as stated in paragraph 8 of the report of the bank recently presented to Dáil Éireann. The rate of interest varies from time to time according to the proportions and amounts of the several assets held by the bank but is reflected generally in the income earned by the bank as set out in the accounts of the bank for the year ended 31st March, 1951, which were also presented to the Dáil. In connection with the figures therein, the Deputy is, no doubt, aware of the fact that central banks, as lenders of last resort, must always maintain a position of extreme liquidity, resulting of necessity in a low level of earnings.
In explanation of the foregoing figures, it should be added that the reduction in assets between March and July is due to borrowings by the Minister for Finance of Loan Counterpart Fund moneys from the bank and that, as against this realisation of external assets, we have now an uncovered dollar liability amounting in all since borrowings from that fund began to £45,806,163 on 17th July last calculated on the basis of the present sterling dollar rate of exchange.
May I take it that the total income of the Central Bank on the £80,600,000 they have invested in sterling assets amounts only to £432,953 0s. 10d. or a half of 1 per cent.?
The Deputy may take nothing of the sort.
May I take it, therefore, that paragraph 31 of the Central Bank report is false and misleading?
No.
May I take it, therefore, that the figures set out therein are incorrect?
The Deputy, I repeat, may take nothing of the sort. The Deputy may take it that his supplementaries merely bring the fact home to my mind that he does not understand and cannot interpret that report.
Mr. O'Higgins
That is a common failing. The entire country does not understand it.
I asked a simple question of the Minister for Finance, namely, to tell this House the total amount of interest received by the Central Bank on £80,000,000. I repeat that question to the Minister.
The Deputy has all that information furnished to him in extenso in the report of the Central Bank and in the accounts of the Central Bank which are presented to the House and circulated to Deputies.
Mr. O'Higgins
The report does not state that.
Does the Minister deny that the total interest on that £80,000,000 is only a half of 1 per cent.? Does he admit it or deny it? A straight answer: yes or no. A half of 1 per cent.?
The Deputy ought to bear with me for a moment.
Answer the question.
The Deputy cannot appreciate a straight answer.
We have not got one.
He has got a very informative answer. I reminded him of the fact that the Central Bank as lenders of last resort must necessarily be content with a very small, a very modest return on their investments in order to maintain a position of extreme liquidity. I suggest, however, that the Deputy should study this fact which I have revealed to the House.
I asked the Minister whether it is correct to state that the rate of interest was half of 1 per cent. I have not yet got an answer to that.
It is quite obvious that the Deputy does not want an answer to his question. I have given the Deputy the fullest possible information available to me.
Except the answer.
In consequence of the fact that the late Government pursued the policy advocated by the Deputy, we had to convert £45,000,000 of sterling assets into a dollar debt.
The question I asked the Minister was whether or not the rate of interest received by the Central Bank on £80,000,000 invested in England was only the half of 1 per cent.
I have told the Deputy that that is not so.
Will not the Minister say if he does not want to give an average what is the highest rate of interest and what is the lowest received by the Central Bank on investments?
That would be quite impossible to answer.
It is not a question of fact?
In order to clear up the matter would the Minister issue another gloomy statement?
Look at "cheerful Jimmy!"