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Balance of Payment (BOP)

Balance of Payment (BOP). Balance of Payment. The BOP of a country can be defined as a statement of all economic transactions of a country with the rest of the world during the period of time, usually one year

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Balance of Payment (BOP)

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  1. Balance of Payment (BOP)

  2. Balance of Payment • The BOP of a country can be defined as a statement of all economic transactions of a country with the rest of the world during the period of time, usually one year • Systematic accounting of all economic transactions between the resident of a nation and the rest of the world during a period of time, usually one year

  3. Purpose of Balance of Payments • Yields the necessary information on the strength and weakness of the country in international economic relations • Find the overall gains and losses from the international economic transactions • Give warning signals for future policy formulation

  4. BOP Accounts • Current Transactions • Capital Transactions • Balance of Trade and Balance of Payments • Disequilibrium in balance of payments • Devaluation and its impact • Policy measures to correct the disequilibrium in balance of payments

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