International financial developments

• The current account deficit of the United States increased sharply in 1983. Elsewhere, there was a corresponding strengthening in the current account positions of the main country groupings as world trade began to revive. These trends seem likely to continue during 1984.
  
  
• 'Spontaneous' lending in the medium-term syndicated credit market remained subdued throughout 1983 and into 1984 but developing and Eastern bloc countries have been more active borrowers in recent months. Announcements of lending associated with restructuring packages, which had been substantial in 1983, were very slight in the first quarter of 1984. Credit terms for a number of borrowers have improved.
  
  
• New issues of bonds, and especially of floating-rate notes, continued to be buoyant in the first four months of 1984 but the market faltered in May as dollar interest rates rose and uncertainty affected US financial markets.
  
  
• The dollar strengthened in late April and early May as US interest rates firmed, but it subsequently eased in markets unsettled by concerns over the international banking system. Sterling's effective index moved lower.

International financial developments