What is Balance of Payments account?

cbse-class-12

#1

What is Balance of Payments account? Where are borrowings from abroad recorded and why?


#2

Balance of Payments account refers to the official transaction book, which records all international transactions between residents of home country and that of the rest of the world. Balance of Payments account is classified into current account and capital account. Borrowings from abroad are recorded in the; capital account of Balance of Payments as it is a foreign liability for the country.