Balance of Payments definition

It is a record which summarizes the monetary transfers of foreign currency (FC) into and from the country. These transfers include FC, the sources of which are: imports, exports, investments by foreigners in the USA, investment of US citizens abroad etc. The balance of payments has an additional line called: reserve assets (FC balances of the state).

 

Aside from presenting the Balance of Payments definition, this section also identified its two (2) components:

  1. Current account

  2. Capital and financial account