Balance Of Payment Case Study

1458 Words3 Pages

1) The Definition of balance of payment (BOP) The balance of payments, also known as balance of international payments and abbreviated BOP, of a country is the record of all economic transactions between the residents of the country and the rest of the world in a particular period (over a quarter of a year or more commonly over a year). These transactions are made by individuals, firms and government bodies. Thus the balance of payments includes all external visible and non-visible transactions of a country. It is an important issue to be studied, especially in international financial management field, for a few reasons. 2) Justify four reasons why it is useful for a country to have data on balance of payment.  Arrange and records the data of a country Balance of payment accounts show the accumulation of debts, the repayment of interest and principal and the country’s ability to earn foreign exchange for future repayment.  Help government in taking decisions It helps the administration in taking choices on money related and financial approaches from one viewpoint, and on outside exchange and installments issues on the other. On account of a creating nation, the balance of payment demonstrate the degree of reliance of the …show more content…

This amount shows that this country facing surplus in their current account. The surplus amount of the current account because of the goods account has the surplus amount which is the amount is higher than other account in the current account. The other account in the current account shows deficit and the accounts are the services account which has amount –RM 9,592. The primary income and secondary income account also shows deficit which has amount –RM 33,975 and –RM 17,498 respectively. The surplus of goods account can cover the overall account in the current account which make it surplus even the other account in current account shows

Open Document