Capital Account

Definition

The capital account is part of a country's balance of payments that measures the flow of financial assets into or out of a country. It includes investments in physical assets like real estate or machinery, as well as financial assets like stocks or bonds.

Related terms

Foreign Direct Investment (FDI): Investments made by individuals or companies from one country into businesses located in another country.

Portfolio Investment: Investments made in financial instruments such as stocks, bonds, or mutual funds issued by foreign entities.

Official Reserves: Foreign currency reserves held by central banks to stabilize their own currency value and manage international trade flows.