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    Balance of Payment (Bop) : Ankita Pandey

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    Ankita Sharma Pandey
    The Balance of Payments (BoP) is a systematic record of all economic transactions between residents of a country and the rest of the world. It presents a classified record of receipts from exports, services, and capital inflows, as well as payments for imports and services and capital outflows. The BoP is an important indicator of pressure on a country's foreign exchange rate and helps forecast short-term market potential. It has several components, including the current account, capital account, financial account, errors and omissions account, and reserves.

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    Balance of Payment (Bop) : Ankita Pandey

    Uploaded by

    Ankita Sharma Pandey
    29 views21 pages
    The Balance of Payments (BoP) is a systematic record of all economic transactions between residents of a country and the rest of the world. It presents a classified record of receipts from exports, services, and capital inflows, as well as payments for imports and services and capital outflows. The BoP is an important indicator of pressure on a country's foreign exchange rate and helps forecast short-term market potential. It has several components, including the current account, capital account, financial account, errors and omissions account, and reserves.

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    Bop

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    The Balance of Payments (BoP) is a systematic record of all economic transactions between residents of a country and the rest of the world. It presents a classified record of receipts from exports, services, and capital inflows, as well as payments for imports and services and capital outflows. The BoP is an important indicator of pressure on a country's foreign exchange rate and helps forecast short-term market potential. It has several components, including the current account, capital account, financial account, errors and omissions account, and reserves.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    29 views21 pages

    Balance of Payment (Bop) : Ankita Pandey

    Uploaded by

    Ankita Sharma Pandey
    The Balance of Payments (BoP) is a systematic record of all economic transactions between residents of a country and the rest of the world. It presents a classified record of receipts from exports, services, and capital inflows, as well as payments for imports and services and capital outflows. The BoP is an important indicator of pressure on a country's foreign exchange rate and helps forecast short-term market potential. It has several components, including the current account, capital account, financial account, errors and omissions account, and reserves.

    Copyright:

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    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 21

    Balance of Payment (BoP)

    Ankita Pandey

    Definition
    The Balance Of Payments of a country is a systematic record of all economic transactions between the residents of a country and the rest of the world. It presents a classified record of all receipts on account of goods exported, services rendered and capital received by residents and payments made by them on account of goods imported and services received from the capital transferred to non-residents or foreigners. Reserve Bank of India (RBI)

    Importance of BoP

    The BoP is an important indicator of pressure on a countrys foreign exchange rate . The BOP helps to forecast a countrys market potential, especially in the short run. Changes in a countrys BOP may signal the imposition or removal of controls over payment of dividends and interest, license fees, royalty fees, or other cash disbursements to foreign firms or investors.

    Contents of BoP
    Current

    account Capital account Financial account Net errors and omissions account Reserves and related items: official reserve account

    Current account

    Net export/import of goods (trade balance) Net export/import of services Net income (investment income from direct and portfolio investment plus employee compensation) Net transfers (sums sent home by migrants and permanent workers aboard, gifts, grants and pensions)

    Capital account

    Capital transfers related to the purchase and sale of fixed assets such as real estate

    Financial account
    Net

    foreign direct investment Net portfolio investment Other financial items

    Net errors and omissions account


    Missing

    data such as illegal transfers

    Reserves and related items: official reserve account

    Changes in official monetary reserves including gold, foreign exchange, and IMF position.

    Components of the trade


    Imports -bulk imports: petroleum, crude & products, bulk consumption goods, other bulk items. -non bulk imports: capital goods, mainly export related items Exports -agriculture and allied products, ores and minerals, manufactured goods, mineral fuels.

    Import proportion (in %)


    45 40 35 30 25 20 15 10 5 0 1970-71 1980-81 1990-91 2004-05 petroleum, crude & products bulk consumption goods other bulk items capital goods mainly export related items

    Export proportion (%)


    80 70 60 50 40 30 20 10 0 1970-71 1980-81 2004-05 others agriculture & allied products ores & minerals manufactured goods minerals fuels

    Invisibles(%)
    particulars A. services -travels -transportation -software services -miscellaneous B. Transfers C. Income 2003-04 36.4 5.1 3.2 44.4 (16.3) 76.8 (16.2) 2004-05 45.4 3.1 .8 53 (11.6) 66.8 (12.2)

    BoP in five year plans


    300000 200000 100000 0 -100000 -200000 -300000 1st 2nd 3rd 4th 5th 6th 7th 8th 9th plan plan plan plan plan plan plan plan plan -400000 trade deficit net invisibles BoP

    In
    150000 100000 50000 0 -50000 -100000 -150000 -200000

    th 10

    five year plan

    trade deficit net invisibles BoP

    2002-03

    2003-04

    2004-05

    Countries with which India trade


    OECD (1)European union -France -Belgium -Germany -UK -Italy (2) North America -Canada -USA (3) Other OECD -Australia -Japan -Switzerland
    -

    OPEC Iran Indonesia Saudi Arabia UAE Eastern Europe Russia Developing countries China Hong-Kong South Korea Malaysia Sigapore SAARC Africa others

    Direction of indias exports

    developing countries euopean union eastern europe OPEC

    other OECD north america

    Direction of indias imports

    developing countries european union eastern europe

    OPEC north america other OECD

    Thank you
    Any questions????????????

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