The pound has fallen against the deutschmark, after the president of the Dutch central bank indicated that currencies would enter monetary union at their existing ERM central rate.

The Irish currency fell by 1.5 pfennigs to around DM2.5040 in late trading and was at 84.80p against a weaker sterling. Mr Arnout Wellink, the Dutch central banker, was reported as saying that he did not see any problem " because the existing central rates will be taken" for conversion to monetary union. "It would be strange if it was done otherwise."

The pound's central ERM rate is DM2.41 and most analysts in Dublin believe it is likely to be locked in to monetary union at that level.