The Punt Takes a Pounding…
By Irish America Staff
December / January 2001
If you’re planning a trip to Ireland, now’s the time. The Irish pound has hit a 15-year low in its exchange rate with the dollar, falling to as low as 95 cents at the time of going to press. It is expected that the rate will continue to fall due to the Euro’s weak performance on foreign currency markets. The Irish pound or punt is now tied to the Euro since eleven European countries formed the unified currency in 1999.
“The Euro looks set to remain weak as there are signs of continued pressure on the currency,” Geraldine Concagh, an economist with Allied Irish Bank’s capital markets in Dublin, told The Irish Voice. “We’ve seen it hit new lows day after day. It is partly due to the strength of the dollar, but also to the yen.”
The weakening of the currency stands in contrast to the positive growth of European economies, running counter to the fundamentals of economics. As Concagh points out, “The figures have all been positive. The weaker economies of the Euro zone have been picking up recently and so while economies are booming, currencies are falling. As we go to press the exchange rate for the Euro against the dollar is about 83 cents.
“Though economies such as ours are strengthening,” she continues, “the U.S. economy continues to outperform the rest.”
There is no sign of recovery in the immediate future without intervention from the European Central Bank, but as Concagh points out, ECB intervention would be useless without the support of other international banks such as the Federal Reserve, and as Concagh says, “The Fed aren’t interested in weakening the dollar just to accommodate other currencies.”
Meanwhile Ireland’s population boom continues unabated as the country reaches its tenth consecutive year of population growth. The population is now at 3.79 million, the highest population level since 1881. As Brian Lavery reported in The New York Times, immigrants outnumbered people leaving the country for the fifth year in a row, by 42,300 to 18,200. Irish natives returning to Ireland made up 43 percent of the immigrants, the largest single group. ♦