Central Bank Deputy Governor Stefan Gerlach has said that investors are expecting the Government will be successful in its negotiations with Europe about reducing Ireland's debt.
Mr Gerlach told RTÉ News that investors were "pricing in" further political developments and expecting there would be changes over the coming months.
He said sentiment towards Ireland had turned and people are now anticipating that Ireland will return to the markets very soon.
Mr Gerlach said investors are expecting yields, or interest rates, on Government bonds will continue to fall.
He said that as an investor you would want to buy those bonds now and "pocket" the gains.
Reduced interest rates would mean better access to credit for firms and households.
He said there was a "much greater belief" in the financial community that Ireland was on the mend.
The yield on Irish bonds has fallen significantly since the ECB announcement on Thursday that it will begin buying government debt in larger quantities.
On unemployment, Mr Gerlach said it should fall well below 10%, but it was hard to say how many jobs had been permanently lost to the economy.
"If it is going to be 7%, 5% or 3% I just can't say," he said.
Good progress
President of the European Council Herman Van Rompuy has praised said Ireland for making "such good progress on all fronts".
On his Twitter account, (@euHvR) Mr Van Rompuy said the proof of Ireland's success came in July when the country returned to the international bond markets.
He added that Ireland was "attracting considerable investment from the US".
Mr Van Rompuy chairs the meetings of EU leaders, the next of which is planned for October.
