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    Balance of Payments

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    Suraj Bhan
    The document discusses the balance of payments of a country, which is a statement of all monetary transactions with the rest of the world over a period of time, usually a year. It includes exports and imports of goods and services, as well as international purchases and sales of financial and real assets. The current account includes trade in goods and services as well as current transfers. The capital account includes borrowing, foreign investment, NRI deposits, banking capital, and short-term trade credit.

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    Balance of Payments

    Uploaded by

    Suraj Bhan
    15 views11 pages
    The document discusses the balance of payments of a country, which is a statement of all monetary transactions with the rest of the world over a period of time, usually a year. It includes exports and imports of goods and services, as well as international purchases and sales of financial and real assets. The current account includes trade in goods and services as well as current transfers. The capital account includes borrowing, foreign investment, NRI deposits, banking capital, and short-term trade credit.

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    The document discusses the balance of payments of a country, which is a statement of all monetary transactions with the rest of the world over a period of time, usually a year. It includes exports and imports of goods and services, as well as international purchases and sales of financial and real assets. The current account includes trade in goods and services as well as current transfers. The capital account includes borrowing, foreign investment, NRI deposits, banking capital, and short-term trade credit.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    15 views11 pages

    Balance of Payments

    Uploaded by

    Suraj Bhan
    The document discusses the balance of payments of a country, which is a statement of all monetary transactions with the rest of the world over a period of time, usually a year. It includes exports and imports of goods and services, as well as international purchases and sales of financial and real assets. The current account includes trade in goods and services as well as current transfers. The capital account includes borrowing, foreign investment, NRI deposits, banking capital, and short-term trade credit.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 11

    BALANCE OF PAYMENTS

    It is a statement of accounts showing all monetary


    transactions of a country with the rest of the world during a
    period of time, say a year.

    They broadly include


    1. Export and Import of goods
    2. Export and Import of services
    3. International sale and purchase of financial assets
    4. International sale and purchase of real assets
    COMPONENTS OF CURRENT ACCOUNT

    1. Export and Import of goods


    2. Export and Import of services – Factor
    services like rent, interest and profit and
    Non factor services like insurance and
    banking
    3. Current Transfers – for e.g. NRI
    remittances, gifts and grants
    COMPONENTS OF CAPITAL ACCOUNT
    1. Borrowing
    2. Foreign Investment- FDI and FII
    3. NRI deposits made in the domestic
    economy
    4. Banking capital refers to foreign assets
    held by the commercial banks
    5. Short-term trade credit
    BALANCE OF PAYMENTS
    BALANCE OF PAYMENTS
    BALANCE OF PAYMENTS
    BALANCE OF PAYMENTS
    BALANCE OF PAYMENTS
    BALANCE OF PAYMENTS
    REVISION QUESTIONS
    1. Balance of Payments always balances. True
    or False?
    2. High Rate of inflation in the domestic
    economy causes “deficit balance of trade”.
    True or False?
    3. Borrowing and lending in the international
    money market I a part of current account
    balance of payments. T or F?
    REVISION QUESTIONS
    4. Unfavourable balance on current account leads
    to a high receipt of foreign exchange in the
    capital account. Do you agree?
    5. Current Account deficit can be managed
    through import Substitution. Do you agree?
    6. How are remittances by NRIs helpful in tackling
    BOP deficit?
    7. “Slump in oil prices.”How will this affect CAD?
    8. What will be the effect of foreign investments in
    India on exchange rate?

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