Over the last few years, the arrangements for supporting UK exports invoiced and financed in sterling have been continually expanded. Until autumn 1976, however, support for exports invoiced in foreign currencies was limited to Export Credits Guarantee Department cover for the equivalent sterling value of these exports at the time cover commenced. This meant that if an exporter had a contract invoiced in foreign currency, and sought to protect himself against exchange risks by selling forward his future currency receipts under the contract or by borrowing foreign currency against these expected receipts, he might suffer some loss in meeting his obligations. The sterling provided under his ECGD policies could be insufficient to meet these obligations, if he did not receive the payments due under the export contract, and if sterling had depreciated since his ECGD cover commenced.
Export credit - foreign currency contracts