Dáil Éireann Debate, Tuesday - 24 July 2018
337. Deputy Joan Burton asked the Minister for Finance the amount of Exchequer cash and liquid assets currently on hand; the reason for such a large amount; the carrying cost of this for 2018; the amount of debt and bonds to be refinanced or paid in 2018; the amount of debt raised to date in 2018 by the NTMA; the amount expected to be raised at the end of 2018; and if he will make a statement on the matter. [34871/18]
Amharc ar fhreagra338. Deputy Joan Burton asked the Minister for Finance if the State is carrying large cash reserves in the event of a hard Brexit; and if he will make a statement on the matter. [34872/18]
Amharc ar fhreagraI propose to take Questions Nos. 337 and 338 together.
I am advised by the National Treasury Management Agency (NTMA) that at end-June, Exchequer cash/liquid assets stood at €23.4 billion. This is an increase of just under €13 billion on the end-2017 position. This increase primarily reflects the pre-funding undertaken by the NTMA in advance of large forthcoming bond redemptions. The NTMA raised over €11 billion in new bond funding in the first six months of the year. This is seventy per cent of the mid-range of the full year target issuance of €14-€18 billion. The weighted average interest rate on the new bond issuance in the first half of the year was just above 1 per cent.
It is important to note that approximately 40 per cent of the end-June cash/liquid asset balance is funded from short-term markets at an aggregate negative interest rate. Furthermore, there is a large bond redemption of close to €9 billion in mid-October and so cash/liquid asset balances will decline in the coming months. The NTMA expects to have approximately €13 billion in cash/liquid assets at year-end.
There are two benchmark bond maturities in 2019, one in June and one in October. The combined balance on these two bonds is currently just over €13 billion. Bilateral loans from the UK also begin to mature next year.
The estimated cost of holding cash reserves at the current level is around €1 million per month per €1 billion of borrowing.
As regards Brexit, the NTMA is satisfied that its current funding strategy is appropriate and consistent with its risk appetite.
