asked the Minister for Industry and Commerce if he is aware of the increase in the number and kind of imports due to the present exchange rate position and if he is aware that these imports are placing indigenous industries under considerable pressure; and the steps he proposes taking to protect indigenous industries from the pressures of unfavourable exchange rates.
Written Answers. - Exchange Rate Fluctuations.
35.
Limerick East): There is no evidence in the available trade figures to support the suggestion in the Deputy's question of an increase in imports arising from recent exchange rate movements placing indigenous industry under considerable pressure. I am aware nevertheless of concerns which have been expressed by the CII and others on this subject regarding the competitive disadvantages which confront and may confront some Irish producers. The pace of recent exchange rate movements against the pound sterling and the dollar are considered to have contributed to these problems.
The situation, however, must be viewed in the context of the advantages which can also be expected to accrue over the longer term from cheaper inputs, lower domestic inflation, stable exchange rates with our other EC partners and the prospect of further reductions in interest rates. I would point out that the Government has acted to ensure that these positive aspects, together with the fall in dollar oil prices, are reflected in industry's costs. Interest rates have been reduced since the EMS realignment and there are prospects of further falls.
Notwithstanding the difficult budgetary situation, the Government has ensured that the benefits of cheaper oil have flowed through to reduce industry's costs and to boost domestic demand. The House will be aware that the ESB recently implemented a reduction in the price of electricity to industry.
Exchange rate fluctuations are but one of a variety of elements of total costs such as those associated with wages, quality, marketing, delivery and after sales service. Indeed I would suggest that constant reappraisal by firms themselves of these elements is the best approach to combating such changes and challenges as can arise in the marketplace consequent on currency movements.