Honohan ‘unsure when Ireland will return to markets’

CENTRAL Bank governor Patrick Honohan said it is too early to say when the country will be able to return to markets, according to an interview with Market News International.

“We just have to wait and see that the rest of the environment recovers in such a way that these spreads come down much more rapidly and that the Government can easily get back into the market at realistic and reasonable interest rates,” Honohan told the news agency.

It will be “the key thing in Ireland to make sure the fiscal adjustment happens” in line with the aid programme agreed with the European Union.

He also said that “the more that is done, the sooner we get into the market,” according to MNI. Mr Honohan said he is in favour of reducing the country’s bailout rate and that he would expect “to see a reduction” in Irish banks’ reliance on emergency liquidity.

Mr Honohan said a new European Central Bank liquidity facility to help Ireland’s struggling banks is not likely “for the moment“.

The ECB defied market expectations earlier this month by not announcing a new liquidity facility to ensure struggling banks in Ireland, and potentially in future other eurozone countries, had more guaranteed access to medium-term funding.

Mr Honohan, who is also an ECB Governing Council member, said such a move was unlikely in the near term, although he did not rule it out completely.