29 November 1994
                     ECGD'S PREMIUMS CUT
                              
     Following   today's   Budget   Statement,   the
     President  of  the  Board  of  Trade  announced
     reductions  in  ECGD's premiums  for  political
     risk   equivalent  to  a  cut  of  around   10%
     overall.   In particular rates for a number  of
     markets   which  have  recently  re-established
     their    creditworthiness   are    being    cut
     significantly  -  by more than 20%  in the case
     of  Argentina, Brazil,  Philippines,  Egypt and
     Vietnam.  Substantial reductions are also being
     made  in a number of other important UK  export
     markets such as India and South Africa.
     
     In a small number of markets rates will rise on
     the   expiry  of  the  temporary  premium  rate
     capping arrangements introduced last year,  but
     not until the end of March 1995.  Otherwise the
     changes  will  come into effect on   Monday  12
     December.
     
     The  President  also announced  that  cover  of
     pounds 3.5 billion will be available for 1997/98  for
     'Amber   Zone'  markets  (where  the  risk   is
     significant   or   ECGD's  exposure   is   most
     concentrated   eg  China,  South   Africa   and
     Indonesia).  This represents a continuation  of
     the  trend which has led to a near doubling  of
     the annual allocation of Amber Zone cover since
     1991/92  and  brings the total cover  available
     for Amber Zone Markets for the next three years
     to nearly pounds 10 billion.
     
     Announcing these changes, the President said:
     
     'The  reductions in premium rates will help  to
     improve    UK    exporters'    competitiveness.
     Exporters have an excellent incentive  to  take
     advantage    of   the   substantial    business
     opportunities  in  markets which  will  benefit
     from   rate  reductions.   Coupled   with   the
     substantial cover now available over  the  next
     three  years  for  key export  markets;   these
     changes  underline the Government's  continuing
     determination  to  maintain  the  export  drive
     which is vital for our economic recovery.'
     
     

     
     Note For Editors
     
     Premium  rates  for political risks  are  being
     cut,  by  in  some cases more than  20%,  in  a
     number  of important markets in order  to  make
     ECGD's  premiums more competitive.  The reduced
     rates  will apply with effect from 12 December.
     The  size of the reductions will vary from case
     to  case  -  details are being sent  to  ECGD's
     customers.    For  example,   for   a   typical
     project in India the rate will fall from 5%  to
     3.75%.
     
     Apart  from the markets mentioned in the  Press
     Release changes, generally downwards, are being
     made   in  ECGD  premiums  for  other  markets.
     Political  Risk  rates  for  Mexico,  Colombia,
     Zimbabwe and Slovakia  will rise  but not until
     the  end  of  March 1995 on the expiry  of  the
     temporary  premium  rate  capping  arrangements
     introduced   last  year.   In   other   markets
     political risk premium rates are being cut.
     
     In  addition to these reductions in premium the
     President announced that cover of pounds 3.5  billion
     will  be available in 1997/98 under the  budget
     governing the availability of ECGD cover in the
     so-called  Amber Zone Markets ie markets  where
     the    risk    is   significant   or   exposure
     concentrated.   These markets  include   China,
     Hong  Kong, India, Indonesia, Kuwait,   Mexico,
     Oman,  Philippines,  Poland,  Singapore,  South
     Africa, Turkey, and Zimbabwe.
     
     The  pounds 3.5 billion will be available to  support
     new  commitments  in  1997/98  and  reflects  a
     steady increase in the budget from pounds 2.7 billion
     in  1993/94  to  pounds 2.8 billion  in  1994/95,  to
     pounds 3  billion  in 1995/96 and to pounds 3.2 billion  in
     1996/97.
     
     Setting  the  Amber Zone Budget  on  a  growing
     trend three years ahead reflects the Government
     Strategy   for  boosting  UK  exports,    while
     prudently   controlling  the   risks   to   the
     taxpayer.
     
     Press   enquiries:          Alex   Mayne   Reid
     071 512 7421
     
     
     
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