The yield Ireland secured in recent bond auctions has highlighted how “dislocated” the markets are, according to the National Treasury Management Agency's chief executive.

John Corrigan said the 2.9% rate secured at last week’s 10-year bond auction was lower than the country was able to achieve before the financial crisis, when it was deemed triple-A grade by the major ratings agencies.

Mr Corrigan cited some who have argued the NTMA should be “filling our boots” and taking advantage of the low rate while it remained, however he said they had opted instead to continue regular, relatively small auctions.

Low deposit rates had made it expensive to hold large cash balances, he said, while the money made at bond auctions would also push the country’s debt-to-GDP ratio higher at a time when it was beginning to fall.

Mr Corrigan was speaking at an event organised by the Institute of Certified Public Accountants in Ireland.

He said the country was making progress in that area, which was a vital indicator for many investors.

Taking General Government Debt on a net basis - which would offset cash held by the Exchequer – it now stood below 100% of GDP. 

This ratio would fall further if the Government was to sell its stakes in AIB and Bank of Ireland at “current fair market valuations”, putting it close to countries like Belgium, he said.

Mr Corrigan said the NTMA would continue to work to reduce this figure, and was also looking to manage the country’s “funding cliff”, where large bond redemptions are set to mature.

The NTMA is also in charge of the Ireland Strategic Investment Fund, which is a reconstituted version of the National Pension Reserve Fund designed to act as an Irish-focused investment vehicle.

He said the agency has already completed 13 deals and has a number of other opportunities under consideration as it seeks to invest its €6.8bn.

He said the ISIF was unique across the world, as it had a “double bottom line” of needing to invest in commercial activity that also supported the Irish economy.

He said the body’s fund managers have already review more than 400 investment opportunities, having established offices and senior team members in Dublin.

Mr Corrigan also said the country – and the euro area – still faced a number of challenges as it emerged from the crisis.

He said chief amongst these is the challenged faced by the US Federal Reserve and Britain’s Bank of England, as they move to remove their “loose monetary policy of recent years” without negatively impacting the world economy.