asked the Minister for Finance the total funds invested by the Central Bank abroad; and if he will state in respect of the latest year for which figures are available the total interest received on such investments.
51.
Ceisteanna—Questions. Oral Answers. - Central Bank Funds.
50.
asked the Minister for Finance the amount of moneys invested by the Central Bank in Great Britain.
With your permission, a Cheann Chomhairle, I propose to take Questions Nos. 50 and 51 together.
The total amount of Central Bank funds invested abroad on 31st May, 1971, was £300.7 million, of which £209.6 million was invested in Great Britain. The total income on funds invested abroad in the year ended 31st March, 1971, was £20.1 million.
Would the Minister state where the balance was invested if £209 million was invested in Britain?
The balance was invested in various funds of different countries.
Is the Minister now in a position to state what will happen in the event of Ireland going into the EEC?
I think that is the Deputy's next question.
52.
asked the Minister for Finance if the Central Bank's policy on the investment of its funds in Great Britain will continue on Ireland's accession to the EEC.
The Central Bank keeps its policy in regard to the management of the external reserves under constant review. Any changes in relevant circumstances arising consequent on accession to the EEC will be taken into account in the normal way.
Is there anything about this in the discussions with the EEC?
Not directly but, as the Deputy knows, the question of the reserve role of sterling was raised and the British Government have indicated their agreement in principle to the alteration in the status of sterling as a reserve currency and also the programme for economic and monetary union in the EEC has a considerable bearing on this question. It is quite clear from what has happened that there will be a great deal of negotiation within the EEC on these matters but these negotiations are unlikely to take place before our entry into the EEC; in fact, they will not, so, therefore, we will be taking an active part in these negotiations but they are a long way ahead and I could not forecast what is likely to happen.
May I ask whether the amount we have in Britain more than compensates for what we borrow abroad and whether the interest we are receiving on the amounts in Britain are in excess of the interest we pay on borrowings from abroad?
I am afraid I could not answer that question offhand but the principle which I think the Deputy has in mind is not correct because logically, if one follows up what I think he has in mind, we would then have no external assets.
I would hope that we would have a higher rate of interest on these assets which we have mostly in Britain.
The Deputy will appreciate that, while the investments of external assets by the Central Bank earn interest as I have indicated, they are unlikely to yield the kind of interest that is obtainable by people lending money.
Is it mandatory on us to invest exactly this amount?
No.
What amount?
This is a matter of judgment by the Central Bank.
Where does the Central Bank invest the proceeds of the sale of our gold? Does the Minister know?
That is a separate question.
In a much more lucrative form of investment.
On the contrary.
There is no yield from gold.
The remaining questions will appear on tomorrow's Order Paper.