ECGC to conduct special country rating review on surge in global inflation

[ad_1]



The Export Credit Guarantee Corporation of India (ECGC) will conduct a comprehensive country risk rating review as many nations face intense pressure on balance of payments following a surge in inflation. This may trigger revision in premium on export credit cover based on the risk perception.



There has been a sharp rise in prices of inputs impacting international trade after the Russia-Ukraine conflict early this year. While Asia and Africa have been more impacted, there is a concern for impact on members of Organisation for Economic Co-operation and Development (OECD).


According to ECGC Chairman M Senthilnathan, the review exercise would cover 90 countries, providing a clear picture. The decisions about country rating and premium would follow.


In April 2022, the government-owned export credit insurance agency had placed Sri Lanka under ‘Restricted Cover Category’ following economic and political turmoil in the Island nation.


The country reviews look at prevalent economic and political settings as well as developments that would have an impact in the future – horizon of 12 months.


Meanwhile, as a push for small exporters, it will give enhanced export credit risk cover to banks to the extent of 90 per cent for customers with working capital limit up to Rs 20 crore. The average per cent of cover for the export accounts with a limit of Rs 20 crore is estimated to be around 70 per cent. The State Bank of India (SBI) has inked ECGC to extend this cover to its customers with export credit facility, Senthilnathan said.


About plans for listing of public sector undertaking, chairman said it was looking for listing in the last quarter of the current financial year ending March 2023. The government has infused about Rs 1,500 crore in the last two years.


The Department of Investment and Public Asset Management (DIPAM) has done an initial review. The details about how much amount to be raised as fresh capital through public offering and part sale of government stake would be firmed up later, he said.


ECGC’s net worth stood at Rs 7,840 crore as of March 2022, up from Rs 6,365 crore in March 2021.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor



[ad_2]

Leave a Comment