asked the Minister for Finance if he is aware that the Central Bank plans to expand the money supply by 22 per cent in 1975 roughly in line with the increase in inflation; the exact procedures adopted for this course of action; the agencies through which the supply will be made; the persons and agencies to which the money will be supplied; and the anticipated effect this action will have on the economy.
Ceisteanna—Questions. Oral Answers. - Money Supply Expansion.
5.
Mr. Kenny
The Central Bank, in its statement on monetary policy for 1975, envisaged a growth in the money supply of the order of 22 per cent, in line with the expected increase in gross domestic expenditure.
The expansion of the money supply will be made up of increases in the amount of currency held by the public and in the current and deposit accounts of the banks. The Central Bank will provide currency through the banking system, in the normal way, to meet the requirements of the public and will take such steps as are necessary to ensure that the liquidity of the banks is adequate to support the growth in their resources.
The proposed growth in the money supply is in line with the objectives of economic policy, which are to maintain employment and preserve living standards. The increase in their resources will enable the banks to make more credit available to the private sector, which will stimulate demand. Lending will continue to be directed towards productive purposes but some growth in lending to the personal and financial sectors is also envisaged.
Where did the Central Bank get this money? Did they get it from somebody or did they give it to somebody?
Mr. Kenny
That is a question to which I would like to find the answer myself.
(Dublin Central): They printed it.
Did they print it?
Mr. Kenny
I always thought the Central Bank had plenty of money.
(Dublin Central): They are printing it every day.
I do not think the Parliamentary Secretary knows.
Mr. Kenny
I must ask the Central Bank myself.