Reporting banks continued to reduce their claims on Middle East and African countries in the second half of 1996, latest figures from the Basle-based Bank for International Settlements (BIS) show. In the Middle East, the most marked fall was in Kuwait. This was due to the completion of government repayments pertaining to the $5,500 million raised in 1991 for reconstruction of the country following the Iraqi occupation.
The region’s banking debt with maturity up to and including one year fell as a percentage of total consolidated claims due to net repayment of long- term government debt. This masked ‘a significant shortening’ for Egypt and Iran, the BIS said.
In Africa, the reduction in reporting banks’ exposure was a reflection of a $1,000 million fall for Algeria. ‘A sharp cutback in import financing…seems to have been the main underlying factor’, the BIS reported.