Dáil Éireann Debate, Tuesday - 20 March 2018
24. Deputy Pearse Doherty asked the Tánaiste and Minister for Foreign Affairs and Trade the cost to his Department of negative interest rates on deposits held; the details of same for agencies under his aegis; and if he will make a statement on the matter. [11738/18]
Amharc ar fhreagraThe Department of Foreign Affairs and Trade is responsible for two Votes: Vote 27- International Co-operation and Vote 28 - Department of Foreign Affairs and Trade. There are no agencies under the aegis of the Department.
In 2017, negative interest charges totalling €4,235.42 were incurred on Vote 27 and paid to one commercial bank. In the period to end-February 2018, costs of €2,030.06 have been incurred on Vote 27 and paid to the same bank. Negative interest charges were also incurred on Vote 28 and paid to one commercial bank, different from the one to which charges were paid on Vote 27. In 2017, a total of €2,570.58 was paid. In the first two months of 2018 a total of €671.50 was paid.
These costs are unavoidable and relate to the need to draw-down funds from the Paymaster General’s Office for payments which may not have a value date until two to three days hence. These payments cannot be processed, however, without having the necessary funds in the bank account when the payment instruction is issued.
Negative interest arises from the necessary application by the Central Bank of Ireland of the policies and decisions of the European Central Bank. The value arising from the payment of negative interest by banks or by the State accrues to the Central Bank and adds to its profits. The Department is advised by the Department of Finance that some 80% of the Central Bank’s annual surplus is paid to the Exchequer and that in 2017 the payment amounted to €1.836 billion in respect of the 2016 surplus.
