what does balance of payment account of a country recorded
Dear student,
Balance of payment (BOP) refers to the record of statements of economic transactions of a country with the rest of the world. In other words, it records the inflow of foreign exchange into the country and outflow of foreign exchange from the country. Those transactions that cause an inflow of foreign exchange are recorded as positive items in the BOP while those that cause an outflow of foreign exchange from the country are recorded as negative items in the BOP.
Economic transactions included in the BOP-
Balance of payment (BOP) refers to the record of statements of economic transactions of a country with the rest of the world. In other words, it records the inflow of foreign exchange into the country and outflow of foreign exchange from the country. Those transactions that cause an inflow of foreign exchange are recorded as positive items in the BOP while those that cause an outflow of foreign exchange from the country are recorded as negative items in the BOP.
Economic transactions included in the BOP-
- Visible items (all types of physical goods that are imported and exported by the country)
- Invisible items (all types of services like banking and unilateral transfers by the country like gifts)
- Capital transfers (the capital receipts and capital payments of the country)