Business Irish

Sunday 25 June 2017

Foreign debt held by Irish companies and households 'at €25bn'

Brendan Keenan

Brendan Keenan

THE foreign debt of Irish companies and households is unofficially estimated at €25bn as of September, after latest figures from the CSO show €618bn debt for companies, other than banks, including operations in the International Financial Services Centre (IFSC).

But Irish firms have significant foreign assets to offset their foreign debts, which are not included in these figures.

The foreign debt of all IFSC operations is estimated to be around one trillion euro (€1,000bn).

That suggests banks and financial institutions operating outside the IFSC had foreign debt of around €480bn, before counting their foreign assets.

The Central Bank's foreign debts plunged from €103bn at the end of June to €56bn at the end of September, as it was able to reduce its own loans to stressed Irish banks. The change also includes normal transactions in the euro-zone system of payments between banks.

The Government had €23bn in short-term foreign debt at the end of September, out of a total of €73.4bn in total borrowings from foreign institutions.

Short-term debt, which has to be replaced every few months, was 32pc of the total foreign borrowings -- down from a peak of 35pc at the end of June.

Crisis

Before the global financial crisis the National Treasury Management Agency (NTMA) here held almost no short-term debt.

However, even before the collapse of Lehman Brothers investment bank in September 2008, the NTMA had borrowed €16bn in such debt to guard against possible difficulties in raising longer-term funds -- difficulties which did arise in the spring of last year.

Irish Independent

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