1987 - Year of the shrinking market?
The global borrowings of the World Bank will fall to about $9 billion in 1987, as compared with $10.6 billion in 1986 and $11.1 billion in 1985.
The biggest of all the supranational borrowers, the World Bank this year had $69.8 billion outstanding in long-term debt, well diversified over 23 markets and 20 currencies. Short-term debt stood at $3.5 billion. The average cost of outstanding debt is 8.25%.
The bank in a major player in the swaps market, executing over $2 billion in swaps last year, mainly in yen and the major European currencies.
Its liquidity pool is over $20 billion, about 80% of total expected repayments over the next five years.
One reason for the expected fall in borrowing next year is that the bank's loan disbursements have recently been lower than expected. Its traditional project lending to Third World countries is being replaced by policy adjustment lending. However, its 1988 borrowing volume may rise again, particularly if interest rates are in its favour.