asked the Minister for Finance if he will outline in detail the method whereby Government foreign borrowing supports our external reserves; and if such support is only for the period the money has been borrowed but not drawn upon or for the entire period of the loan.
Written Answers. - Foreign Borrowing and External Reserves.
142.
When the Government borrow abroad, the foreign currency proceeds of the loan are converted into Irish currency at the Central Bank and become part of the official external reserves, which are held by the Central Bank. Conversely, the servicing and repayment of the borrowing, like other external payments, involves the purchase of foreign exchange from the Central Bank, which reduces the reserves.
143.
asked the Minister for Finance the proportion of our current external reserves which has been created by Government foreign borrowing.
As at 31 December 1980 the proportion of the external reserves accounted for by net Government foreign borrowing during the year 1980 was 42 per cent.