Eamon Walsh
Ceist:155 Mr. E. Walsh asked the Minister for Agriculture, Food and Forestry the limits and control on currency speculation by his Department; and will he make a statement on the £65 million loss in 1993. [7913/95]
Written Answers. - Currency Speculation.
My Department has never engaged in currency speculation. The Department as Irish Intervention Agency borrows to fund ongoing FEOGA Guarantee expenditure pending subsequent EU recoupment and to finance intervention purchases. Borrowing facilities are subject to the consent of the Minister for Finance who guarantees them.
My Department's objective at all times is to borrow the funds required at least cost in accordance with general Government policy.
The Government decided as from 1982 that these borrowings should be largely in foreign currencies. It did this to relieve pressure on the Irish market and to enable the Department to take advantage of lower interest rates than applied domestically. It was conscious of the fact that this would inevitably lead to some exchange rate losses but expected that these would be outweighed by the interest rate gains. This expectation was in fact borne out in practice. Over the period 1982 to 1994 it is estimated that the interest rate savings exceeded in the net exchange rate losses by about £45 million. Government policy on this issue as operated by my Department was, therefore, successful in generating overall savings for the Exchequer.