§ Mrs. Winifred Ewing
asked the Chancellor of the Exchequer what provision is made by Her Majesty's Government for compensating borrowers from agencies such as the European Investment Bank for increased interest charges and capital repayments which may occur as a result of currency fluctuations.
§ Mr. Robert Sheldon
United Kingdom public sector bodies borrowing in foreign currencies, from the European Investment Bank or elsewhere, can normally avail themselves of the exchange cover scheme. Under this, the proceeds of the foreign currency borrowing are sold to the Exchange Equalisation Account in exchange for sterling at the exchange rates then prevailing. The EEA undertakes to provide foreign currency for the service and repayment of such borrowing at the same rate of exchange, rather than the market rate at the time of the payments, and in return receives part of the interest rate benefit.