The Balance ofPavmentsChapter Two
Chapter Objective: This chapter serves to introduce the student to thebalance of payments. How it is constructed andhow balance of payments data may be interpreted
❖Chapter Objective: ❖This chapter serves to introduce the student to the balance of payments. How it is constructed and how balance of payments data may be interpreted
Chapter OutlineBalance ofPayments AccountingBalance of Payments AccountsThe Current AccountThe Capital and Financial AccountStatistical DiscrepancyOfficialReservesAccountThe Balance of Payments ldentityBalance of Payments Trends in MajorCountries
Chapter Outline ❖Balance of Payments Accounting ❖Balance of Payments Accounts ▪ The Current Account ▪ The Capital and Financial Account ▪ Statistical Discrepancy ▪ Official Reserves Account ❖The Balance of Payments Identity ❖Balance of Payments Trends in Major Countries
BalanceofPaymentsAccountingThe Balance of Payments is the statisticalrecord of all transactions betweendomestic and foreign residents overacertain period of time in the form ofdouble-entry bookkeepingN.B.what are we referring to when we say“residents"?
Balance of Payments Accounting ❖The Balance of Payments is the statistical record of all transactions between domestic and foreign residents over a certain period of time in the form of double-entry bookkeeping. N.B. what are we referring to when we say “residents” ?
BalanceofPaymentAccountsThe BOP accounts are composed of thefollowing(as defined in the fifth edition of IMF's Balance of PaymentsManual)TheCurrentAccountThe Capital and Financial AccountStatistical DiscrepancyThe Official Reserves AccountREFERENCE:SixthEditionoftheIMF'sBalance of Payments and InternationalInvestment PositionManual
Balance of Payment Accounts ❖The BOP accounts are composed of the following (as defined in the fifth edition of IMF’s Balance of Payments Manual) ▪ The Current Account ▪ The Capital and Financial Account ▪ Statistical Discrepancy ▪ The Official Reserves Account REFERENCE: Sixth Edition of the IMF's Balance of Payments and International Investment Position Manual