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Defence: Procurement

Ministry of Defence written question – answered on 13th May 2020.

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Photo of Kevan Jones Kevan Jones Labour, North Durham

To ask the Secretary of State for Defence, what the total amount of foreign exchange rate losses attached to MOD defence programmes was in the last financial year.

Photo of Jeremy Quin Jeremy Quin The Minister of State, Ministry of Defence

As has been longstanding policy under successive Governments the Ministry of Defence buys forward foreign exchange using forward purchase contracts agreed with the Bank of England. The impact of this is that foreign exchange movements are smoothed over time.

Taking the last financial year in isolation, the volatility in exchange rates resulted in an increase of circa £200 million, this is part of normal Departmental business to manage.

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