Peter Mathews (Dublin South, Fine Gael)
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Question 93: To ask the Minister for Finance the amount of money drawn down from the International Monetary Fund denominated in special drawing rights; the amount of annual interest charged on this money denominated in SDRs; the date by which this money must be repaid to the IMF; and if he will make a statement on the matter. [8499/11]

Peter Mathews (Dublin South, Fine Gael)
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Question 94: To ask the Minister for Finance if borrowings from the International Monetary Fund will be repaid in euro or in special drawing rights; if they are being repaid in SDRs if the National Treasury Management Agency has purchased currency forwards to reduce the Exchequer's risk to currency fluctuations; and if so the price of the currency forwards purchased; and if he will make a statement on the matter. [8500/11]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 93 and 94 together.

The first drawdown of IMF funds under the Programme took place on 18 January 2011. The amount was SDR 5,012,425,200, equivalent to some €5.8 billion at the time of drawdown. All funds drawn from the IMF under the Programme will be repaid by a series of twelve equal semi-annual capital repayments, beginning 4.5 years after the drawdown and finishing on the tenth anniversary of the drawdown.

Interest will be paid quarterly at the IMF's standard interest applying to countries which draw on its Extended Fund Facility. This rate is set by reference to the IMF's basic rate of charge plus surcharges which vary based on the amount of funds drawn relative to a country's IMF quota and the duration for which funds are outstanding. The SDR interest rate is calculated weekly by the IMF with reference to financial instruments of each component currency in the SDR basket, expressed as an equivalent annual bond yield: three-month Eurepo rate; three-month Japanese Treasury Discount bills; three-month UK Treasury bills; and three-month US Treasury bills. Up to a threshold of three times a country's IMF quota, a margin of 1% over the SDR rate is payable. On all funds beyond that threshold, an additional margin of 2% is payable plus a further margin of 1% if the funds are outstanding for more than three years.

In view of this calculation method, the annual interest cost is variable and is also influenced by market related activities undertaken by the NTMA. The annual interest amount will be known with certainty when the full year interest payments have been made. Based on current market conditions, the NTMA has estimated an effective average annual cost of around 5.20%, taking into account quota revisions and the cost of hedging and assuming drawdown of the full €22.5 billion available from the IMF.

The IMF facility is denominated in special drawing rights. The SDR is a basket of four currencies, Euro, US Dollar, Sterling and Japanese Yen. The obligation is to repay SDRs, i.e. the value of the currency amounts in the SDR basket on the due dates. The details of which currencies will be used to effect the payment of the value of the SDR on each repayment date will be discussed with the IMF prior to the payment date. The NTMA has in place a programme to hedge its liabilities in respect of the non-euro currency component of the SDR borrowings from the IMF. Detailed pricing information is commercially sensitive and not disclosed by the NTMA.