asked the Minister for Finance why the rate of interest to borrowers from the Local Loans Fund has been increased to nine per cent.
Ceisteanna—Questions. Oral Answers. - Local Loans Fund.
The rate of interest charged to borrowers from the Local Loans Fund is now 8½ per cent, having been increased to that rate from 7¾ per cent which was the rate up to 17 March, 1969. This increase is due to the rise in interest rates generally which has led to an increase in the cost of the Exchequer borrowing necessary for the purpose of making these loans. It is understood that local authorities who borrow from the Loan Loans Fund for the purpose of making loans under the Small Dwellings Acquisition Acts charge an additional ½ per cent to cover their administrative costs thus making their charge to borrowers the 9 per cent referred to by the Deputy.
Would the Minister be good enough to say, in regard to the 9 per cent figure which is now being charged to local authorities for loans, is that based on the interest rate which the Government was constrained to offer for the last national loan?
Not so much as the rate at which we have to borrow now, Exchequer Bills and so on.
Does the Minister anticipate this is the highest to which the rate is likely to rise, or is this a matter on which he can speak?
I really do not know. Interest rates are at an extraordinarily high level all around the world. We can only hope that not only will they not go higher in the foreseeable future but that they will go down.