Ireland's economy is showing the slightest signs of a recoverypicture-alliance / dpa

The International Monetary Fund (IMF) has said that Ireland does not need its help.

The IMF and Ireland’s Department of Finance had to reassure investors after rumors circulated that the government would need outside financial aid. Ireland’s cost of borrowing was at a high on board markets, with an interest rate of 6.5% on Friday.

"As we have said before, we do not envision that IMF financing will be needed," an IMF spokesperson told the Irish Examiner. The Department of Finance also insisted there was no truth to the story, saying the rumors were based on a “local misinterpretation of a research report.”

Despite interest on government debt hitting an all time high, the National Treasury Management Agency is planning to go ahead with the sale of nearly $2 billion in new government debt on Tuesday.

When asked about the Barclays Capital report that said the country might need external assistance, Financial Minister Brian Lenihan replied,” What it said was that the government was taking the right steps at the right time.”

Prime minister Brian Cowen said on Friday that there was “important work to be done for the country in the weeks and months ahead.”  Cowen is facing a threat that members of  Fianna Fáil, his own party, are pushing for a change in leadership.

Cowen said his party will be “held together” by a “duty to do what is right by the country.”