The National Treasury Management Agency (NTMA) has admitted it is considering not holding its next monthly bond auction in May if bond yields stay as current levels.
Oliver Whelan, head of funding at the NTMA, said Ireland could postpone bond auctions if necessary.
"If we had to skip a couple of months or so, it wouldn't cause us any problem," he told RTÉ's Morning Ireland today.
Mr Whelan's comments come shortly after the NTMA's chief executive John Corrigan said the agency was considering postponing its planned auction in May.
Mr Corrigan said last night bond pricing is currently "irrational."
The rate demanded by investors to hold bonds has risen sharply in recent days on the back of the economic crisis in Greece. However, many analysts believe that Ireland can afford to postpone its next bond auction.
Alan McQuaid, chief economist with Bloxham, said Greek contagion fears would probably hit Irish bonds for some weeks to come but that the NTMA could comfortably afford to skip its next bond auction.
“They’re not in dire straits,” he said earlier this week pointing to the €23 billion the agency holds in cash balances and the €25 billion it controls in the National Pensions Reserve Fund. “Their funding needs are very low,” he said.
Deirdre Ryan, an economist with Goodbody, was equally reassured by the State’s funding position, also pointing out that the NTMA “could afford to sit tight” if necessary.