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Balance of Payments Contents
Introduction
Components of balance of Payments
Foreign Trade
Import and Export of goods and services
Balance of Payments Introduction
Payments are made in exchange of Imports
Payments are received in exchange of Exports.
IMPORTER
EXPORTER
Balance of Payments Introduction
BALANCE OF PAYMENT ACCOUNT
Payments (Debits) ` Receipts (Credits) `
Import of goods Export of goods
Import of services Export of services
Unilateral transfers (Payments)
Unilateral transfers (Receipts)
Capital Payments Capital Receipts
TOTAL TOTAL
Payments are debited
Receipts are debited
Balance of Payment - Definition
Balance of Payments Introduction
BALANCE OF PAYMENT ACCOUNT
Payments (Debits) ` Receipts (Credits) `
Import of goods Export of goods
Import of services Export of services
Unilateral transfers (Payments)
Unilateral transfers (Receipts)
Capital Payments Capital Receipts
TOTAL TOTAL
Payments are debited
Receipts are credited
Balance of Payment - Definition
Balance of Payments (BOP) refers to the statements of accounts recording economic transactions of a country with rest of the world.
Balance of Payments Introduction
Capital Account
Components of Balance of Payments
Current Account
Balance of Payments Components of Balance of
Payments
Capital Account
Components of Balance of Payments
Current Account
Balance of Payments Components of Balance of
Payments
Financial investment flows
E.g. Inflows of money from overseas into government bonds, property.
$
Components Capital Account
Banking capital transactions of external financial assets and liabilities.
E.g. NRI Deposits.
Components Capital Account