New international credit to the Middle East came to an abrupt halt in the first quarter of 1998, reflecting the weakening in the financial position of countries largely dependent upon oil revenues, new Basle-based Bank for International Settlements (BIS) figures show.

The bank's comments accompany the release on 31 August of the latest data on assets and liabilities of various countries vis-a-vis commercial banks in OECD countries.

Middle East countries, which include Israel in the BIS listings, had aggregate liabilities of $79,288 million to OECD banks in March 1998 - against assets of $212,326 million. The liabilities were down nearly $900 million on December 1997 - a reversal of the trend over 1997 when liabilities increased by about $8,000 million.

The first quarter saw an increase of about $2,500 million in Middle East assets held by OECD banks. These assets had been at $219,490 million in December 1996.

Countries showing the biggest shift in liabilities in first-quarter 1998 include Iran, Oman, Israel, Saudi Arabia, Kuwait and Egypt.

Iranian liabilities rose by $824 million to $8,477 million; Oman showed a $539 million rise to $2,941 million; Israel registered a fall of $541 million to $6,144 million; Saudi Arabia reduced its liabilities by $448 million to $17,540 million; Kuwait increased them by $470 million to $7,456 million; and Egypt raised them by $394 million to $3,914 million.

Iranian assets with OECD banks rose for the first time in nearly a year by $103 million to $6,750 million; Saudi assets went up by $3,234 million to $57,344 million; Egyptian assets dropped by $1,123 million to $22,152 million; Kuwaiti assets fell by $618 million to $13,881 million; Syria, whose liabilities had hardly changed, replenished its assets by $758 million to $11,044 million; and UAE assets fell by $1,758 million to $44,520 million.

Among countries outside the BIS' Middle East reporting area, Algeria shows a reduction of $620 million in its liabilities to $7,516 million, while raising its assets by $255 million to $6,886 million; and Sudan shows a $197 million drop in assets to $758 million, with its liabilities remaining almost unchanged at $127 million.