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Dáil Éireann debate -
Tuesday, 23 Jun 1992

Vol. 421 No. 4

Written Answers. - Capital Flows.

Ivor Callely

Question:

103 Mr. Callely asked the Minister for Finance if there has been any noticeable capital outflow from Ireland in the first quarter of this year; if he will outline the steps, if any, he will take if such capital outflow occurs; and if he will make a statement on the matter.

Capital flows both into and out of the Irish currency are a continuous feature of the financial markets. In net terms, however, the available information does not point to substantial outflows of funds in the first quarter of the year. Autonomous capital flows appear to have been in broad balance during the first three months of 1992 and the official external reserves increased by £240 million.

If outflows were considered excessive the Central Bank would take the necessary steps to protect the value of the Irish currency, including, for example, intervention on the foreign exchange market, and/or the adjustment of liquidity conditions in the money market.

Over the long term, the best protection against outflows of funds from the domestic economy is the maintenance of a stable economic environment, including a firm and stable exchange rate, and responsible fiscal policies, and the Government will continue to provide this environment.

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