Rory O'Hanlon
Question:52 Dr. O'Hanlon asked the Minister for Finance the impact of changes in interest rates since the budget on the Exchequer borrowing requirement and the budget deficit. [6275/95]
Written Answers. - Interest Rate Fluctuations.
It is too early in the year to make a firm assessment of the impact which the recent fluctuations in interest rates will have on fiscal performance in 1995. Not all of the implications are negative. For example foreign interest rates to which the Exchequer is exposed have shown mixed trends since the budget arithmetic was settled, and exchange rate movements are also relevant. Further, the yield from Deposit Interest Retention Tax, would benefit from higher domestic rates and contribute to any additional costs that may have to be borne by the Exchequer in consequence of the increases. Those costs cannot be quantified at this stage.
The budget arithmetic was drawn on a prudent basis and I would expect from our analysis of changes so far that any negative implications of the interest rate changes referred to by the Deputy can be accommodated within the overall targets which I set out on 8 February last.