State the components of capital account of Balance of Payments

cbse-class-12

#1

The components of capital account of Balance of Payments are as follows:
(i) Foreign investment It includes Foreign Direct Investment and foreign institutional investment or portfolio investment by the residents of the country in abroad or by the rest of the world in domestic country.
(ii) Borrowings It includes commercial borrowing by the government or private sector from rest of the world and external assistance to/by a country.
(iii) Official international reserve It includes the changes in gold and foreign exchange reserve with the Central Bank.