Written Answers. - National Treasury Management Agency.

Trevor Sargent

Question:

510 Mr. Sargent asked the Minister for Finance his views on a recent report (details supplied) that the role of the National Treasury Management Agency may be subsumed into his Department; and if he will make a statement on the matter. [1704/99]

I understand that the report to which the Deputy refers stated that there is speculation that the role of the National Treasury Management Agency may be subsumed into the Department of Finance because the adoption of the euro has eliminated exchange rate fluctuations between Ireland and the other member states which also adopted the euro.

I have no plans to subsume the role and functions of the National Treasury Management Agency into the Department of Finance. It is true that EMU means that the national debt is now overwhelmingly in domestic currency (the euro being the currency of the State and the Irish pound unit being a sub-division of it) and that the benefit of the reduction in foreign exchange risk to the Exchequer is considerable. It should also be appreciated however that, while significant, foreign exchange risk is only one of a number of categories of risk that have to be managed as part of the overall management of the national debt. Other important areas of risk – which remain to be managed even with the advent of the single currency – include liquidity risk, interest rate risk, operations risk and credit risk.
At end-1998 the Irish national debt stood at £29.5 billion, some £4.4 million higher than the £25.1 billion level that prevailed at end-1990 when the agency was established. The annual cost of interest payments on the debt amounts to some £2.2 billion, representing approximately 14 per cent of Government net current expenditure. These large amounts, in both absolute and relative terms, highlight the continuing need for the national debt to be managed in as efficient a manner as possible.