Dáil Éireann Debate, Tuesday - 5 July 2016
125. Deputy Thomas P. Broughan asked the Minister for Finance to report on the impact of the Brexit result on the euro exchange rate and quantitative easing; and if he will make a statement on the matter. [19191/16]
Amharc ar fhreagraThe result of the UK Referendum to leave the European Union has had market implications over the past week. This volatility in the markets, including the currency market, was not unexpected in the light of the uncertainty caused by the result.
The pound sterling to euro exchange rate experienced significant losses following the result on the referendum on Friday 24, which stabilised slightly on Tuesday 28. However, the rate had slight losses on Friday 1 July. The euro's exchange rate against the pound sterling continues to be largely driven by uncertainty related to the referendum. The magnitude of changes in EUR to USD have been much more modest.
Under the European Central Bank's (ECB's) Expanded Asset Purchase Programme, often referred to as "Quantitative Easing" (QE), the eurosystem (comprising the ECB and the national central banks of the euro area) has been purchasing €80 billion of public and private assets per month and plans to do so until at least March 2017, or until inflation returns to levels consistent with price stability, defined as inflation below, but close to, 2 per cent. Purchases of sovereign debt began on 9 March 2015.
It is important to note that monetary policy is a matter for the European Central Bank which is independent. The ECB has stated that it is closely monitoring financial markets and is in close contact with other central banks. The ECB has stated that it stands ready to provide additional liquidity, if needed, in euro and foreign currencies.
