The government owed the kingdom’s banks about JD3.9bn ($5.5bn) at the end of March, up 34 per cent on the JD2.9bn that it owed the local banking sector at the end of 2007.

The Ministry of Finance was forced to increase its borrowing after it secured a deal to write off $2.4bn of debt held by foreign governments for a discounted price of $2.1bn.

The JD3.9bn that the government owes its banks is now greater than the JD3.8bn it owes to external creditors, which include foreign banks and other governments.