Debts to banks fall

18 July 1997

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.

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