Vol. 425 No. 8
63 Mr. Noonan (Limerick East) asked the Minister for Finance the full intervention cost incurred by the Central Bank in defence of the punt in terms of external reserves expended, foreign currency swaps from commercial banks, and liabilities incurred to other Central Banks; and if he will give details of the Government's policy to ensure that the external reserves are replenished.
Between end-August 1992 and end-December 1992, the external reserves fell by nearly £940, despite an offsetting upward valuation of £71 million, and net Exchequer foreign borrowing of about £1,070 million. In addition, the Central Bank incurred liabilities to other Central Banks through the European Monetary Co-operation Fund, in respect of certain interventions to support the Irish pound. At end-December, these liabilities amounted to £716 million. The Central Bank has not published data in regard to foreign exchange swaps outstanding during the period in question. The official external reserves are assets of the Central Bank and their management and replenishment are operational matters for that organisation. However, I am informed by the Central Bank that, since the devaluation, the level of unwinding of leading and lagging of trade-related payments and of speculative positions against the Irish pound has been substantial. This flow of funds has thus helped to reconstitute the official external reserves.
