The balance of payments account is a record of all economic transactions between a country and the rest of the world over a specific period. It includes trade in goods, services, income flows, and financial transfers.
Related terms
Current Account: The current account is a component of the balance of payments that records trade in goods and services, net income from abroad (such as wages and investments), and unilateral transfers.
Capital Account: The capital account tracks international transactions involving assets like real estate, stocks, bonds, and loans. It reflects changes in ownership or financial claims between residents and non-residents.
Official Reserves: Official reserves refer to foreign currency holdings (such as US dollars) held by central banks to manage exchange rates and ensure stability in international transactions.