Further fall reported in OPEC surpluses

25 March 1994

Middle East oil exporters' deposits with Western banks fell nearly $20,000 million to $148,524 million in the year to September 1993, figures released by the Basle-based Bank for International Settlements (BIS) show. Western bank claims on these countries fell by $2,052 million to $65,036 million in the same period.

BIS says that the further decline in Middle East deposits was due to falling oil revenues, restructuring of domestic banking systems and, in most cases, the fact that most Middle East oil exporters have limited access to foreign capital.

OPEC countries continued to draw extensively on their own assets abroad to fund rising budget deficits, the BIS said. The withdrawal of identified deposits was fairly widespread, but was most pronounced in the third quarter for Saudi Arabia and Libya.

Saudi Arabia's deposits fell by nearly $8,000 million in the year to September 1993 to $61,531 million. Nearly half of this fall took place in the third quarter. Saudi Arabia's deposits are more than $24,000 million lower than before the Kuwait crisis.

Libya's deposits fell by $2,800 million in the third quarter to $1,837 million because of UN sanctions. UAE and Oman also experienced declines of 18 per cent and 22 per cent respectively over the 12-month period.

Net flows to Turkey were $400 million in the third quarter compared with $2,000 million in the preceding quarter.

The BIS says that Western banks were net recipients of funds from non- OPEC countries of the region. Total claims on this group which includes Egypt, Israel, Jordan, Syria and Yemen fell nearly $2,500 million in the year to September 1993. There were particularly large net deposit inflows from Egypt in the third quarter. These were related to the country's improved external financial situation, BIS says.

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