asked the Minister for Finance the consequences to the capital programme flowing from the nonavailability of the proposed 20 million dollar loan; and the particular projects which will be delayed thereby.
Ceisteanna—Questions. Oral Answers. - American Loan.
6.
The postponement of the proposed 20 million dollar loan has not necessiated any change in the capital programme. External resources have recently been provided by a borrowing from the International Monetary Fund of $22½ million and these may be drawn upon for the immediate financing of the programme.
If I understood the public statement correctly when the recent borrowing was announced, it was indicated that it had no relationship to the 20 million dollar borrowing which had previously been proposed. Can the Minister say upon what items it was proposed to expend this 20 million dollar loan, which has not been forthcoming.
This 20 million dollar loan was intended for the general Capital Budget and as to the suggestion that there is no relationship between the two loans, this refers to the source from which the borrowing was to be made.
Will the consequences be, then, that the Government will take another £7 million from the commercial banks in order to keep their capital programme going at the level which the Minister suggests and thereby make another £7 million short for the private sector?
That does not follow.
If you are going to carry out the same programme with £7 million less, you must be going to get the money somewhere else.
What are the interest rate and the terms of repayment?
In the International Monetary Fund, there is a very complicated system whereby the interest rate is worked out. The interest rate is nil on the first half of it and is cumulative on the second half. It works out to be a very cheap rate in the long run but, of course, it is for a much shorter period than the usual foreign borrowing.
Does the borrowing from the International Monetary Fund involve the hypothecation of our own gold contribution to the fund?
It refers to what they call the first tranche.
Does it involve the hypothecation of our gold reserves?
That is a matter of detail I would like to get notice of.
It is the first time we have had to shovel out gold that I can remember.