Lending by international banks to Middle East states rose to $51,554 million in June 1994, up by more than 5 per cent compared with six months earlier, according to figures released on 13 January by the Basle-based Bank for International Settlements. The rise was mainly due to increased lending by European banks, which account for more than 60 per cent of loans to the region. Lending by institutions from the rest of the world fell during the same period.

The report recorded a dramatic reduction in short-term Iranian debts following bilateral negotiations with individual groups of creditor banks. Iran’s debts maturing in the ‘up to and including one year’ category made up 68 per cent of the $8,170 million debts to reporting banks in June 1994, down 7 percentage points on six months earlier.

Short-term lending to Saudi Arabia rose only slightly during the six- month period, because Saudi Arabia took up no sizable new loans during the period, the report says.

Lending to the UAE increased to $3,626 million in June 1994, up by 67 per cent on six months earlier. Claims on Iraq rose during the period, because of changes in the accounting treatment of the country by certain reporting banks, the report says.

In Turkey, outside the BIS Middle East category, short-term lending accounted for 51 per cent of debts worth $17,300 million in mid-1994, down by almost 8 percentage points.

The Maghreb states and Sudan are also excluded from the Middle East category.