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Balance of Payments
1.1)Definition
Balance of payments is an accounting record of all monetary transactions of
a country with rest of theworld which includes payments for exports and
imports of goods, services, capital and financial transfersfor a specific period,
usually a year, and is prepared in a single currency, typically the domestic
currencyfor the country concerned. [1]The transactions are presented in the form
of double-entry book keeping.Reserve Bank of India defines Balance of payment
as
The balance of payments of a country is a systematic record of all economic transactions
between theresidents 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 onaccount of goods imported
and services received and capital transferred to non-residents or foreigners.