Michael McGrath (Cork South Central, Fianna Fail)
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119. To ask the Minister for Finance the NTMA's plans to raise funds from the market for the remainder of 2018, 2019, 2020 and 2021; the detail of the estimated value to be raised in each of these years; the estimated interest on these bonds; and if he will make a statement on the matter. [8048/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy may be aware, last December the National Treasury Management Agency (NTMA) announced that it planned to issue €14 - €18 billion of Government bonds over the course of 2018.

It has already issued €5.25 billion of benchmark bonds so far this year. This is one third of the mid-way point of the €14 - €18 billion range.

The volume of new bond issuance required in the years 2019 – 2021 will depend on a whole range of factors. These include the Exchequer Borrowing Requirement (EBR), the volume of maturing debt that needs to be refinanced, targeted cash balances and funding from other sources such as short-term paper and State Savings products.

As is customary, the NTMA will, in December of each year, announce its planned bond funding range for the following year.

Owing to the pre-emptive action taken in recent years, the expected volume of new debt issuance required to refinance maturing debt in the coming years is considerably lower than it was three years ago.

The refinancing requirement over the period 2018 – 2020 has effectively been halved.

Through the early repayment of IMF and Swedish and Danish bilateral loans together with the early buyback and switching of near term maturing bonds for longer maturity bonds the 2018 – 2020 refinancing requirement has been reduced by some €16 billion, from €60 billion to €44 billion. Furthermore, reflecting the NTMA strategy of pre-funding, Exchequer cash balances stood at over €17 billion at the end of January.

The interest on the debt to be issued in the coming years cannot be predicted with certainty. However, by lowering our refinancing needs to such an extent, we have effectively taken out insurance and reduced our sensitivity to higher interest rates.

Michael McGrath (Cork South Central, Fianna Fail)
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120. To ask the Minister for Finance the impact on the interest rate on Government bonds of the European Central Bank halting its quantitative easing programme; the impact on same of the ECB reversing its quantitative easing programme by selling €10 billion worth of bonds per month; the impact on same of the ECB raising interest rates by 0.25%, 0.75% and 1% respectively; and if he will make a statement on the matter. [8049/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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Having already been reduced in size twice, Quantitative Easing (QE) is now scheduled to run until at least September 2018. This was confirmed by the European Central Bank (ECB) at its most recent Governing Council meeting in January, when it stated that net asset purchases under the Programme are intended to run until the end of September 2018, or beyond if necessary. The Governing Council also repeated its expectation that key ECB interest rates will remain at their present levels for an extended period of time, and well past the horizon of the net asset purchases.

While it is not possible to predict the future path of ECB monetary policy or interest rates, the strategy of the National Treasury Management Agency (NTMA) in recent years has been to take advantage of the favourable market conditions for sovereign issuers wherever possible. Through taking pre-emptive action over the past three years, it has significantly improved our debt redemption profile in the coming years and lowered our debt interest bill.

The refinancing requirement over the period 2018 – 2020 has effectively been halved.

Through the early repayment of IMF and Swedish and Danish bilateral loans together with the early buyback and switching of near term maturing bonds for longer maturity bonds the 2018 – 2020 refinancing requirement has been reduced by some €16 billion, from €60 billion to €44 billion. Furthermore, reflecting the NTMA strategy of pre-funding, Exchequer cash balances stood at over €17 billion at the end of January.

In addition, the accelerated buy-back and replacement of Floating Rate Notes from the Central Bank of Ireland also locks in current interest rates.

These actions reduce refinancing risk for the Exchequer and offer insurance against the possibility of interest rate increases in the coming years.

Finally, I should also mention the positive impact these actions have had on the cost of servicing our National debt. The interest bill, which was as high as €7.5 billion as recently as 2014, fell to just under €6.1 billion last year.