Balance of payments - Definition

The balance of payments accounts of a country record the payments and receipts of the country in their transactions with other countries. If all transactions are included, the payments and receipts of each country are, and must be, equal. Any apparent inequality simply leaves one country acquiring assets in the others. For example, if Americans buy automobiles from Japan, and have no other transactions with Japan, the Japanese must end up holding dollars, which they may hold in the form of bank deposits in the United States or in some other U.S. Investment.

BOP figures tell us about how much is being spent by consumers of a country and firms on imported goods and services, and how successful the country's firms have been in exporting to other countries and markets.

Terms near "Balance of payments"

Balance of Trade

Balance Sheet

BAM

Bank Credit

Bank Line

Bank of England

Banknotes

Bar Chart

Bar Graph

Barrier Option