Answers:

Balance of payments (BoP) is an account statement which holds the summation of all international transactions a country has had with other nations. It reflects a country’s performance in trade, in attracting foreign capital and the impact on the foreign exchange reserve of a country. As per the balance of payments manual of the IMF, BoP comprises current account, capital account, errors and omissions, and change in foreign exchange reserves.


The balance of payment on the current account is a deficit or a surplus. If the payments are more than the receipts under the current account, there will be deficit. If the receipts are more than the payments, the current account will show a surplus.