Balance of payment:

Balance of payments (BOP) accounts are an accounting record oI all monetary transactions
between a country and the rest oI the world. These transactions include payments Ior the
country's exports and imports oI goods, services, Iinancial capital, and Iinancial transIers. The
BOP accounts summarize international transactions Ior a speciIic period, usually a year, and are
prepared in a single currency, typically the domestic currency Ior the country concerned. Sources
oI Iunds Ior a nation, such as exports or the receipts oI loans and investments, are recorded as
positive or surplus items. Uses oI Iunds, such as Ior imports or to invest in Ioreign countries, are
recorded as negative or deIicit items.
When all components oI the BOP accounts are included they must sum to zero with no overall
surplus or deIicit. For example, iI a country is importing more than it exports, its trade balance
will be in deIicit, but the shortIall will have to be counter-balanced in other ways such as by
Iunds earned Irom its Ioreign investments, by running down central bank reserves or by
receiving loans Irom other countries.

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