Government intervention and interest rates
O’Kennedy argued that Government policies had driven domestic interest rates sharply higher and contributed to currency speculation, asking whether such intervention would recur. The Minister said interest-rate policy was a separate matter for the Central Bank; O’Kennedy cited the Taoiseach’s earlier claim that the Government had kept rates down.
Would the Minister not acknowledge that one of the reasons for a certain amount of currency speculation is that people in enterprise found it necessary to protect themselves against the huge hike in interest rates here which is a direct consequence of public policies in soaking up all the available market funds on the domestic market last year? Does the Minister not accept that the fact that we have a real interest rate now of 13 per cent, 4 per cent inflation, and a 17½ per cent AA rate is a direct consequence of direct Government actions over the last 12 months? Can the Minister assure us that we will not see——
Comment on this
Can the Minister assure us that we will not see the same Government intervention on the market this year to force interest rates here away out of line with those elsewhere thereby giving rise to the problem to which this question addresses itself?
Comment on this
I have to agree with the Ceann Comhairle that that is an entirely separate question. As the Ceann Comhairle has ruled on a number of occasions, interest rate policy is a matter for the Central Bank and is not something for which the Minister for Finance is answerable.
Comment on this
I think the Taoiseach is on record in this House in the Adjournment Debate in December as saying — I shall give the reference in a few moments —"We kept interest rates down". I am only going on what the Taoiseach said and it is on record.