THE Minister for Finance rejected opposition claims that he was responsible for speculation against the pound.

Fianna Fail spokesman on finance, Mr Charlie McCreevy, suggested that Mr Quinn had made "a grave error" in recent comments.

"I accept that anybody can make an error in an off the cuff remark, but regarding currency matters, I can say that a shut mouth is often the very best policy."

The Minister's comments relating to the rate at which he would like to see the pound entering the new rate mechanism gave the green light to speculators to have a go at the Irish currency, Mr McCreevy said.

It was not in anybody's interest to have the pound forced down in such a manner. "Would the Minister not accept that his words were unwise and should not have been said?"

Mr Quinn said the situation about the pound and its position in the band had been known for the past nine months. He added that his comments were reflecting what many people had said in the trading sector of the Irish economy.

But Mr McCreevy insisted the Minister's remarks had without any shadow of doubt led to the speculation against the pound in the last few days.

Mr Quinn said he had outlined the Government's policy on currency in March, 1995, when the pound was trailing just under parity with sterling. This was that the pound should trade comfortably at within the ERM band, and that should be the position as we moved forward towards membership of the single currency on January 1st, 1999, he added.

Since then, sterling had strengthened considerably to the position where it was now a very strong currency relative to where it was a year ago. It was not known how long this would last and where it would go.

As he had said on Wednesday, no decision had been taken yet about the rate at which the pound would be fixed and enter the single currency, Mr Quinn said. It might very well be, he added, that different currencies would be fixed at different rates relative to the central rate.

The PD spokesman on finance, Mr Michael McDowell, said there was "a bit of spin doctoring" going on. "We are told that it is a planned currency shift. But at the same time, in the same newspapers, we read that the Central Bank was spending an awful lot of money trying to prevent this movement in currency."

He said there was a fundamental conflict between the notion that the Minister's remarks signalled a change in the Government's attitude, designed to bring about a realignment of currency values, while at the same time the Central Bank was "flinging away" taxpayers' money trying to prevent that realignment.

Mr Quinn said it was always going to be the case, coming closer to EMU, that the question of the rates at which currencies would join the single currency would be a matter for interpretation, and the market would take different views.

"I have said, and our policy has been consistently repeated, that we want to trade comfortably within the ERM bands. And that is the policy as enunciated by me, and reaffirmed by me, to the Central Bank. The actions of the Central Bank, on a day to day basis, are a matter for themselves."