Dáil Éireann Debate, Thursday - 30 September 2010
63 Deputy Eamon Gilmore asked the Minister for Finance the average sovereign interest rate assumed in the elaboration of the estimated spending on servicing the national debt as set out in the most recent stability programme update; the annual cost to the Exchequer for every 100 basis point increase in this interest rate; and if he will make a statement on the matter. [34032/10]
Amharc ar fhreagraThe National Treasury Management Agency (NTMA) has advised that, as is usual, the estimates for debt servicing costs in the Stability Programme Update were prepared on the basis of the market conditions for Irish Government bonds prevailing at the time of the preparation of the Budget. For reasons of commercial sensitivity, the NTMA does not disclose the assumptions underlying the estimates.
The funding requirement for 2010 was some €20 billion. The NTMA estimate that a 100 basis point increase in rates would lead to an increase cost of €200 million for a full year. However as a result of the NTMA's policy of locking in long-term funding at historically low rates over the last number of years, over 95% of the debt now outstanding carries fixed rates of interest. With the September auction, the NTMA achieved its target of raising €20 billion in long-term funding from the bond markets in 2010. This funding is fixed at a weighted average cost of 4.7% which is the same as the average cost achieved in 2009.
