Is it not the case that, because of the exchange controls introduced last December and the divergence between the Irish £ and sterling, more money is being borrowed on the Irish market than was the case previously because sterling is more expensive for Irish borrowers? Does this not have the effect of reducing the amount available for investment here? Does it not also have the effect of pushing up interest rates with a subsequent effect on investment in the second half of this year?

The movement of interest rates is worldwide. As the Deputy is aware, interest rates had increased in each of the EEC countries within the past few months because they were reflecting world interest rates. It is true that certain borrowings have taken place here which prior to the break with sterling had taken place in London. On the other hand, the matter is not quite as straightforward as that because there are facilities in certain circumstances in countries that are trading with Britain enabling them to borrow in Britain despite exchange controls.

There are also other developments in relation to the market which counteract the effect the Deputy indicated. I cannot say at this stage whether the net effect of these various factors is to have reduced the amount of money available for borrowing—I forget what phrase the Deputy used but I think he means the private sector generally, and I cannot say if that is correct. As the Deputy will also appreciate, especially from certain announcements by the Central Bank, the matter is further complicated by growth in credit beyond the lines laid down by the Central Bank. But I have no reason to believe that there is any serious liquidity problem arising as a result of the break in the link with sterling.

I am not saying that it is directly as a result of the break in the link with sterling. It is because interest rates have gone to such an extent here that there is lack of confidence on the part of investors about the future, and they are reluctant to invest. The Minister says that interest rates are going up world wide—that is correct—but they are going up from a very much lower rate. We are, I think, 2 per cent above the English lending rate in this regard. Therefore, money which previously could have been borrowed at cheaper rates in London—even though it is not prohibited to borrow in London—because of the difference in the value of the pounds, costs more to repay, and that differential is wiped out because of the revaluation of the currencies.