asked the Minister for Finance the steps he is taking in conjunction with the Central Bank and the associated banks to bring about a reduction in interest rates; and if he will make a statement outlining his views on the present level of interest rates.
Written Answers. - Bank Interest Rates.
638.
The Deputy is no doubt aware that with effect from the close of business on Friday, I July 1983 the principal associated bank lending rates were reduced by 1¼ percentage points in the case of the AAA and AA rates and 1 percentage point in the case of the A rate. Reductions ranging from 1 percentage point to 1¾ percentage points were made at the same time in associated bank deposit rates.
These reductions were facilitated by a fall in interest rates in the Dublin interbank market. They bring the AAA and AA lending rates back to the levels which obtained immediately prior to the increase of 18 March last. The reductions bring the A lending rates down to their lowest level since May 1981.
There does not appear to be any scope at present for further reductions in associated bank interest rates. Future domestic interest rate movements will depend on international trends and on the degree of progress at home in reducing inflation, the balance of payments deficit and the Exchequer borrowing requirement.