The Government is to wait until global markets have settled down following Britain's decision to leave the European Union before assessing the long-term effects on the Irish economy.

The market interest rate on the Republic’s 10 year bonds fell below 0.6 per cent for the first time ever on Wednesday, having contracted by about 30 per cent from late last week.

Minster for Finance Michael Noonan said on Tuesday the UK's decision to leave the EU could lead to economic growth in the Republic next year being 0.5 per cent less than previously forecast.

Speaking at the announcement of a €29 million social housing development in inner city Dublin on Wednesday, Minister for Public Expenditure Paschal Donohoe said the Government would wait for markets to settle before assessing the long-term impact.

“What we need to do is remain very careful about making calls regarding the long-term impact,” he said. “What we’re seeing happening now in the UK and across global markets is very sudden swings in both ways in response to a result.

“When that has settled down, we’ll be in a position to make a longer-term evaluation of the effects on the Irish economy. We’ve reaffirmed that our plans for this year and 2017 won’t change, but our prospects beyond that will change.

“We’ll make an evaluation of that when we have a clearer idea of the stance the British government are going to take in relation to their new relationship with the EU.”

Complex

Speaking at the same event, Minister for Housing Simon Coveney said Dublin would play a role in "complex" negotiations surrounding Britain's exit from the EU, while at the same time guarding the Republic's interests.

"What's needed here is a calm but firm response from Ireland to guard our own interests," he said. "That's complex. It's not easy. To respond in an overly dramatic way wouldn't really contribute anything positive to this discussion.

“Ireland needs to stay close to Britain in terms of our relationship which is multi-layered from economic, to political, to social. Obviously, in the context of the relationships on this island also.

“We also need to maintain a very progressive and strong relationship with the EU, which we’re an active member of. Doing all of those things while at the same time being involved in negotiating Britain’s exit from the EU will be complex but I think we have responded in a way that is calm and clear.

“We are trying to help companies that need help and we’re trying to provide clarity where it’s possible at this stage.”