International financial developments

Quarterly Bulletin 1984 Q1
Published on 01 March 1984

The article on page 54 discusses international banking developments last year in some detail. This review is accordingly shorter than usual, omitting material which can be found in the article and focussing on the latest developments. The main points are:

  • Non-oil developing countries' deficits on current account contracted in 1983; there was a change in the pattern of their borrowing, with banks supplying less and the IMF more. In the second half of the year, oil exporting countries returned to small surplus.

  • The combined current account deficits of major OECD countries widened during the course of 1983, but experience varied considerably.

  • The amount raised in syndicated credits remained low in the fourth quarter, though large sums were involved in rescheduling packages and new money associated with them.

  • Fixed-rate bond issues, by contrast, recovered in the fourth quarter, and record amounts were raised through floating-rate notes, which are now an attractive alternative to syndicated credits for some borrowers. The floating-rate note sector remained very active in January and February.

  • UK banks were heavy net lenders in foreign currencies to banks abroad in the fourth quarter, but the amount of interbank business in London fell back.

  • In the foreign exchange market, the focus of attention was the dollar which weakened sharply during February. Sterling's effective exchange rate moved narrowly.

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