Interest rates may not fall as quickly as many had predicted, as wholesale market rates rose in response to comments from the Minister for Finance, Mr McCreevy. Informed sources suggest the Minister's statement on Wednesday and his refusal to rule a revaluation of the currency in or out may have been designed to let the Central Bank hold off rate cuts for as long as possible. His failure to outline his currency policy will be strongly criticised today by the Labour party leader, Mr Ruairi Quinn.

Last night a spokeswoman for the Minister said that interest rates were a matter for the Central Bank and nothing to do with the Minister for Finance. Following Mr McCreevy's statement on Wednesday, when he said a decision on the currency's entry value could not be taken until May, wholesale market rates have risen.

Meanwhile, the pound has continued to gain slightly on foreign exchange markets as one of the world's largest investment banks, Goldman Sachs, bought as much as £150 million to cover itself after substantial selling over the past few months. Other major international banks also hold substantial short positions with a possible £1.5 billion still outstanding.

The pound closed at DM2.5160 in late trade from DM2.5048 on Wednesday and at 84.10p from 84.20p. The pound benefited from the profit-taking, as well as another resurgence of sterling.

Here, Dr Dan McLaughlin, chief economist at Riada Stockbrokers, said the Minister's statement ought to stop interest rates from falling rapidly.

"If this means that the pound will stay at around DM2.50, it will not be low enough for any aggressive buying. Leaving everything in the air like this makes it easier for the Central Bank to keep rates up," he said.

The Bank made it clear in its monetary policy statement last week that it would prefer to keep interest rates as high as possible for as long as possible in a bid to hold inflation in check.

Before the Minister's statement, the key one-month rate which banks and building societies use to set variable rate mortgages had fallen towards 6 per cent. It has now risen back to 6.25 per cent. Economists believe that a sustained rate below 6 per cent will start a round of banks and building society cuts.

Mr John Beggs, chief economist at AIB, also said that this injection of uncertainty by the Minister would help keep rates higher in the short term, although it would not be able to prevent them from falling significantly in the months ahead.

Mr Quinn will tell the UCD Literary and Historical Society tonight that the minister's silence is a serious factor in the sense of alarm beginning to circulate among the business community.

"The extraordinary silence from the Minister for Finance is a cause for serious concern and one which questions fundamentally the competence of this Government to conduct the affairs of our economy in a coherent and clear manner," he said.