Among the main recent developments:
- The combined current account deficit of the major seven OECD countries was unchanged in the second quarter, with a further increase in the US deficit being offset by improvements in Japan and in Europe.
- The improvement in the current account position of developing countries in 1984 was less than had earlier been thought, and the deficit widened again in the first six months of 1985: with net capital inflows in the first quarter also markedly lower, developing countries' reserves fell.
- Floating-rate note issues were again buoyant and the range of currencies in which they are available has broadened: innovation and evolution of the interest rate structure of FRNs has been a particular feature of recent months.
- Strong growth in note-issuance facilities continued in the second quarter and facilities are increasingly offering a range of alternative borrowing options.
- In the foreign exchange markets , the dollar weakened further. Sterling continued to firm in July but subsequently experienced wide fluctuations. The EMS was realigned in July, with the Italian lira effectively devalued by 77/8% within the system.