The main points in the latest period are:
- The combined current account deficit of the major seven OECD countries contracted in the fourth quarter but, for the year as a whole, was four times greater than in 1983. A further substantial increase in the US deficit was primarily responsible.
- During 1984 the current account position of developing countries continued the improvement which started in 1983, though experience varied.
- Announced syndicated credits continued to decline in the fourth quarter. December saw the lowest level of announcements for a decade and activity remained depressed in January and February By contrast, note issuance facilities have increased markedly.
- Issues of fixed-rate bonds and floating-rate notes remained buoyant. In the fixed-rate sector borrowers from the United States and Japan were particularly active during January and February. Liberalisation measures by the Japanese authorities led to a surge of euroyen issues in December which has continued into 1985.
- UK banks' external lending grew modestly in the fourth quarter. Foreign currency deposits also increased although deposits of oil exporting countries fell sharply In December the policy of restricting official sterling holdings to working levels was discontinued.
- In the foreign exchange market the dollar climbed to new highs against all major currencies, including sterling. In the context of the dollar's strength the finance ministers and central bank governors of five major countries') met on 17 January and expressed their commitment to work towards greater exchange market stability and to undertake co-ordinated intervention in the markets as necessary.
International financial developments