•Unilateral transfers
include pension, remittances, gifts and other transfer for
which no specific services are rendered.
They are called unilateral transfers because they represent
the flow of funds only in one direction.
They are unlike export and import, where goods flow in
one direction and the payment flows in the other.
•As per the practice adopted by the RBI, basic balance is not
shown in the BOP statement.
•The debit side and credit side of short term capital transactions are
added to respective sides and then the capital amount is balanced.
•On the contrary, when the overall balance is found deficit, the
monetary authorities arrange for capital flows to cover up the
deficit.
•Such inflows may take the form of drawing down of foreign
exchange reserves or official borrowings or purchases from
the IMF.