Dáil Éireann - Volume 283 - 01 July, 1975

Ceisteanna—Questions. Oral Answers. - Legal Tender Note Fund.

8. Mr. Davern asked the Minister for Finance if he will make a statement on the fact that the item Balance in General Fund which was included amongst the assets of the legal tender note fund has been increasing steadily; the implication of this increase from the point of view of monetary policy; and the manner in [98] which the latest published figures have been compiled.

Mr. Clinton: The forms of asset in which the legal tender note fund may be held are prescribed under statute. The composition of the fund at any particular time, however, is a matter for the Board of the Central Bank in their absolute discretion.

The amount of the fund held in the asset “Balance in General Fund” was around £30 million in recent years. In the past few months there has been an increase and the amount was £50.8 million on 14th June last. I have been informed by the Central Bank that the increase has no implications for monetary policy. The level of this item is reviewed from time to time as the note circulation increases and variations are primarily a matter of administrative convenience.

I would add that the proportion of the fund currently held in this form is approximately the same as when the asset was introduced in 1961.