NOTES

The balance of payments, also known as balance of international payments, encompasses all transactions between a country’s residents and its nonresidents involving goods, services and income; financial claims on and liabilities to the rest of the world; and transfers such as gifts. The BOP figures tell us about how much is being spent by consumers and firms on imported goods and services, and how successful firms have been in exporting to other countries.

•      Inflows of foreign currency are counted as a positive entry (e.g. exports sold overseas)

•      Outflows of foreign currency are counted as a negative entry (e.g. imported goods and services)

The balance of payments is broadly classified into:

•      The current account

•      The capital account