asked the Minister for Finance whether any revaluation of the Irish pound is contemplated.
Ceisteanna—Questions. Oral Answers. - Revaluation of £.
40.
As the Deputy is aware, the Irish pound has been floating in line with the £ sterling against other currencies since June, 1972. It is intended to bring the floating of our currency to an end as soon as circumstances will enable this to be done. It is not possible to anticipate when this will be or what new currency relationships may result. It is not, however, intended to change the one-for-one relationship with sterling.
Can the Minister state the extent of the devaluation of the £ since it was floated in June, 1972?
There is a significant difference between the devaluation of the Irish £ and the £ sterling. Since we have this one-for-one relationship with sterling and have such a very large proportion of our trade with sterling we have no fluctuation so far as 60 per cent of our export trade and 50 per cent of our import trade is concerned. However, on a trade-weighted basis the Irish £ has devalued by 6 per cent compared with a devaluation of about 20 per cent in respect of the British £. The notion is abroad sometimes that perhaps we should break away from sterling and revalue the Irish £, which would then be valued at a figure above the £ sterling; but one consequence of that would be that our industrial exports would become dearer on the British market. Our agricultural exports would not become dearer because under the EEC regulations we would be obliged to bring down the prices of our agricultural exports in order to avoid any advantage which might accrue as a consequence of the revaluation of our £.
Would the Minister agree that the floating of our £ in 1972 has benefited our economy?
It has benefited the Irish economy to the extent that it has given us certain advantages in our export market but, on the other hand, devaluation, as things stand at the moment, means that we import more inflation than we wish to import. Overall the present position is in favour of the maintenance of the existing position. I assure the Deputy that, if the change ever moves in the other direction so that it would be to our advantage to break the established system, we would do that. But as I said to the Finance Ministers in Brussels last week, if they wish Ireland to move into the European "snake" the cure lies in their hands. If they purchased from us as much as Britain purchases from us at present, we would have no difficulty in moving into line with their "snake" rather than with the sterling "snake".