Balance Of Payments Raj Govind Thakur.pptx

PRESENTED BY RAJ GOVIND THAKUR

& CHANDAN KUMAR TO DEEPIKA MAM

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Balance of payments(BOP)accounts are an accounting record of all monetary transactions between a country and the rest of the world. These transactions include payments for the country’s exports and imports of Goods & services , Capital, and financial transfers A country has to deal with other countries in respect of 3 items:Visible items Invisible items Capital transfers

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According to James O Ingram, “ The Balance of payments is a summary record of all economic transactions between residents of one country and the rest of the world during a given period of time.” In the words of Benham , “Balance of payments of a country is a record of the monetary transactions over a period with the rest of the world.”

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(1) Systematic record: It is a systematic record of all economic transactions between one country and the rest of the world. (2) Comprehensiveness: It includes all transactions, visible as well as invisible. (3)Fixed period of time: It relates to a period of time . Generally, it is an annual statement. (4)Self-balanced: from the point of view of accounting, double entry system keeps automatically debit and credit sides of the accounts in balance.

1.CURRENT A C C O U N T B A L A N C E  BOP on current account is a statement of actual receipts and payments in short period.  It includes the value of export and imports of both visible and invisible goods.  The current accounts includes:- export & import of services, interests , profits , dividends.

2.CAPITAL ACCOUNT BALANCE  It is difference between the receipts and payments on accounts of capital accounts. It refers to all financial transactions.  It includes:- private foreign loan flow , movement in banking capital, official capital transactions, gold movement etc.

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Demand and supply currency. Confirm trend in economy’s international trade. Confirms exchange of the currency. Indicate policy shift.

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Basic Balance Net Liquidity Balance Official Settlement Balance

• Items • Receipts or credit • Payments or debit BALANCE OF • Net (+) or (-) PAYMENTS STATEMENTS

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of payment represents a better picture of a country’s economic and financial transaction with the rest of the world

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