asked the Minister for Finance whether he is satisfied that a devaluatation of the Irish £ will not be necessary before the end of this year.
Ceisteanna—Questions. Oral Answers. - Valuation of £.
I am aware that there has been some speculation about the possibility of a devaluation of our currency. I want to put it on record, unambiguously and without qualification, that there is no foundation whatever for any expectation of a change in the parity of the Irish pound.
In our situation a devaluation has nothing to commend it. The Government have already declared their firm intention to take such further measures of restraint as may prove necessary to reduce inflationary pressures. In reaffirming that intention, I wish to make it absolutely clear that these measures would not include devaluation.
Is the Minister saying, therefore, that he is confident of withstanding inflation within the economy for the rest of this year and also of cutting down our balance of payments problem? How does he propose doing this? Does he suggest that he is confident of withstanding both those threats?
The Deputy may not be aware that in fact the balance of payments situation is considerably better than it was.
It is still bad.
It is relatively very good, that is, relative to a number of things, including other countries.
Is the Minister saying that is because of the change of Ministers?
May I reply to the question? The strength of our reserves in relation to other countries is very comfortable. The trend in our balance of payments situation in recent months has been much more favourable than was projected by anybody, I think.
Because of the bank strike and the cement strike.
Of course not. I will be dealing with this in more detail in replying to the debate on the Finance Bill. This does not, of course, mean that inflationary pressures have eased or that it may not be necessary to take some further measures in that regard. The Government have made it quite clear all along that, if it should be necessary to take action to remedy this, it will be taken. The House will be aware of the steps which are being taken at present in regard to the recommendations of the NIEC and their implementation. I think all of us would hope that these would be effective, but what I want to make absolutely clear is that, if they are not effective and if it is necessary for the Government to take further action, that action will be taken, but whatever action we take will under no circumstances include devaluation, which would be of no help to us in our present circumstances.
What happens if the British £ is devalued?
Will the Minister give us an indication of the further measures that may be necessary in his reply to the current debate on the Finance Bill?
I will not anticipate any such measures in detail.