Enterprise Ireland concerned over post-Brexit exchange rate volatility

Though its CEO is certain our strong trade relationship with the UK will continue…

ESRI, Brexit, FDI, Foreign Direct Investment, corporation tax, Ireland, EU,

A poster is seen at a Brexit conference in the Aviva Stadium in Dublin | Image: Rollingnews.ie

As the day some quarters are labelling "Black Friday" rumbles on, more Irish business voices have reacted to the news that a Brexit is coming to pass.

Enterprise Ireland has given its take on the UK’s decision and warned that Ireland will have to immediately deal with exchange rate volatility.

In the immediate term, the government body opined that the key impact on Irish exporters would likely be around the euro-sterling exchange rate.

Enterprise Ireland advised companies that their first step should be to seek financial guidance relating to hedging and managing the associated risks.

It also noted that it would be intensifying its own efforts to support companies respond to the new situation and implement medium term market diversification plans.

Enterprise Ireland CEO Julie Sinnamon said:

"The UK is a key market for Irish exporters and will continue to be one of our largest export markets.

"Ireland is a strong, open and competitive economy and while the result will pose challenges for Irish exporters, now that it is known, we will move forward and implement plans to help our client companies deal with the impacts.

"In addition to our team in the UK, we have put in place a dedicated email address, phone-line and team for Enterprise Ireland clients to respond to their immediate concerns and issues.

"It is worth remembering that there will be a period of at least two years while negotiations take place between the EU and the UK about the specific trade implications.

"Furthermore the UK Prime Minister has indicated that Article 50 of the Lisbon Treaty will not be invoked immediately.

"In this period Enterprise Ireland will continue to work with our clients to help them develop a more competitive position in the UK, and also to diversify into other growth markets including the USA, Northern Europe and Asia Pacific, all of which experienced significant growth in 2015.

"We will be closely monitoring the situation over the coming days and responding appropriately to our client needs."

Meanwhile, KPMG, the professional services company that operates on an all-Ireland basis, also gave its opinion on what Brexit will mean for the island.

Managing Partner Shaun Murphy commented:

"Ireland and the UK are significant markets for each other's goods and services and this will not change but there is a concern about potential unwelcome alterations to trade – this can be avoided if negotiators on both sides stay focussed on minimising trade disruption.

"The Irish/ UK economic relationship is unique in that we share a land border. It's in everyone's interests that the trading relationship between the EU and the UK remains business friendly."

Speaking on cross border trade, Murphy called it "vital to both Northern Ireland and the Republic of Ireland."

He said:

"Given the potential impact on employment and exports, businesses on both sides of the border will want to see quick, effective negotiations that result in minimum cost and disruption to trade. "

As for what Ireland needs to do next?

"A clear signal worldwide of Ireland's commitment to the EU is essential as is the need to impress upon our EU neighbours the need for a fast, business friendly trade deal between the EU and the UK."