asked the Minister for Finance if, in the event of bank interest rates being increased in the UK, he will instruct the Central Bank not to allow an increase in interest rates in this country.

If and when the situation envisaged by the Deputy arises, the appropriate level of Irish interest rates will be considered, giving due weight to all the relevant factors.

Will the Minister inform us that the position has now changed since exchange control was introduced in the middle of December so that the old argument that if British interest rates went up then there was a danger of money leaving this country no longer applies?

There is a change in the situation.

Is it such that I am correct in saying that the argument that if British interest rates went up we would have to follow them to avert the danger of money leaving the country, no longer applies since exchange control was introduced?

The argument has less force than it used to have.

It no longer applies?

That is not correct.

Exchange controls can be imposed on sums leaving this country so as to prevent them leaving.

Not in regard to the holdings here by non-residents.

Of course, but so far as money held by residents or nationals here is concerned, exchange controls can be imposed.

As I have said, the situation is changed.

Is it not true that the principal argument for allowing interest rates here to rise at the same rate as British interest rates was because of this fear? Would the Minister agree now that interest rates here should not rise in parallel with British interest rates?

I have already indicated that if any application for this purpose is made the question will be considered, giving due weight to all the relevant factors including two of the matters which have been adverted to: the change arising from the exchange control regulations in regard to the holdings by Irish residents and the situation in regard to the holdings by non-residents.

Which is a bigger proportion than the amount held by residents?

The next question.

If exchange control is now considered to be effective and safe, why are interest rates not being reduced by the 2½ per cent that they increased unnecessarily if we had exchange control?

Question No. 18. The Deputy is getting into argument.