HC Deb 27 April 1978 vol 948 cc671-2W
Mr. Burden

asked the Chancellor of the Exchequer (1) when the first interest payments are due on the $4,073 billion borrowed in 1977; and what it will amount to for 1978 if none is repaid in the current year;

(2) what is the total amount of interest that will have to be paid on the total overseas borrowing of $8.55 billion if none of the loans are repaid; and what will the interest payable on the loans amount to if there is a loan repayment of $1 billion to the International Monetary Fund.

Mr. Robert Sheldon

The first interest payment dates in respect of the $4,073 million foreign currency borrowing by Her Majesty's Government in 1977 are as follows:

$1.5 billion Eurodollar Syndicated Credit. May 1977
Drawings on IMF $3.9 billion Standby. March 1977
Foreign Currency Bonds April 1978

Because the $1.5 billion syndicated credit is a floating rate loan, and because of exchange rate changes, it is not possible to say precisely in advance what the interest payments in 1978 on the above loans will amount to. At 31st March 1978 however, and assuming no early repayments, interest payments on these loans for the year were estimated to be running at about $283 million.

At the same date, interest payments in 1978 on the $8.55 billion borrowing by Her Majesty's Government since 1st March 1974, and again assuming no early repayments, were estimated to be running at about $620 million. The interest saving from early repayment of $1 billion to the IMF, announced by the Chancellor on 26th January, should amount to about $34 million in April 1978, and a further $90 million over the subsequent three years. There will be a further saving as a result of the second $1 billion early repayment to the Fund, announced in the Budget speech.

Mr. Burden

asked the Chancellor of the Exchequer when the Government intend to carry out their promise to repay early $1 billion to the International Monetary Fund.

Mr. Robert Sheldon

Of the $1 billion prepayment to the IMF announced by my right hon. Friend on 26th January some $866 million was used earlier this month to repurchase the United Kingdom drawing on its first credit tranche. The remaining amount is being prepaid through normal Fund currency operations.

The timing of the further $1 billion prepayment announced by my right hon. Friend on 11th April will be a matter for discussion with the Fund.