(BOP)
The balance of payments of a country is a
systematic record of all economic transactions
between the residents of a country and the rest of
the world.
It presents a classified record of all
receipts on account of goods exported, services
rendered and capital received by residents and
payments made by them on account of goods
imported and services received and capital
transferred to non-residents or foreigners.
Bank of India
Reserve
Indicators of Strengths of a
Nation
Steady accretion to reserves
Moderate levels of current account deficit (CAD)
Changing composition of Capital inflows
Flexibility in exchange rates
Sustainable external debt levels
CAD
The Challenge before the emerging market
economies is to leverage foreign savings
and to promote domestic growth with out
having the long term conences of external
payment imbalances.
Political factors
Political Instability leading to decline in FDI and FII
Populism policies which may encourage imports
Social factors
Change in tastes and preferences leading to demand changes
Cross border prejudices which may lead to expensive sources of
imports
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