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Given that it reflects all payments and liabilities to foreigners and all payments and obligations received from foreigners, the balance of payments is one of the major indicators of a country's status in international trade. It has the potential to influence the prices of free-floating currencies, because free-floating currencies are affected not only by political events or governmentpolicies but also by the economic events represented by the BOP. As every country strives to a have a favorable balance of payments, the trends in, and the position of, the balance of payments will significantly influence the nature and types of regulation of export and import business in particular.
BOPS statistics (at least estimates of major items) are regularly compiled, published and are continuously monitored by companies, banks and government agencies. Often we find a news head line like "announcement of provisional US balance of payment figures sends the dollar tumbling down".
Obviously the BOP statement contains useful information for financial decision matters.
In the short run, BOP deficits or surpluses may have an immediate impact on the exchange rate. Basically BOP records all transactions that create demand for and supply of a currency and the possible impact on the exchange rate. Further they may signal a policy shift on the part of the monetary authorities of the country, unilaterally or in concert with the trading partners. For example a country facing a current account deficit may raise interest rates to attract short-term capital inflow to prevent depreciation of its currency. Or it may tighten credit and money supply to make it difficult for domestic banks and firms to borrow the home currency to make investments abroad. It may force exporters to realize their export earnings quickly and bring the foreign currency home. Countries suffering from chronic deficits may find their ratings being downgraded because the markets interpret the data as evidence that the country may have difficulties in servicing its debt. Finally BOP accounts are intimately connected with the overall saving -investment balance in a country's national accounts. Continuing deficits and surpluses may lead to fiscal and monetary actions designed to correct the balance, which in turn will affect exchange rates and interest rates in the country.
Therefore BOP accounting serves to highlight a country's competitive strengths and weaknesses, and helps in achieving balanced economic-growth. It can significantly affect the economic policies of a government, and the economy itself
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Credit cards impact several parts of your credit history. Pay on-time and you improve your payment history. Keep your balance low, and you improve your utilization rate. Keep you card open and active for a long time, you increase your length of history.
What year was new balance founded?
New Balance was founded in 1906 in Boston, Massachusetts. The company was originally called New Balance Arch Support and was founded by William J Riley.
Four of the eight border states sided with the north why was this important to nouthern war effort?
It tilted the balance crucially in favour of the North - especially as one of the buffer-states was Maryland, which enclosed Washington D.C.
A payment for military service is a an?
a paryment for military service is an
Why were the border states important to the Union?
They held the balance of power. If all eight states of the Upper South had gone Confederate, the Union would have lost. Four of them did. Keeping the other four loyal was Lincoln's biggest headache in the first months of the war.
Advantages and disadvantages of balance of payment?
advantages of balance of payment
Advantages and disadvantage of balance of payment?
advantages of balance of payment
India's balance of payment since 1991?
India's balance of payment since 1991
Does the balance of payment always balance?
International Balance of Payments
What is more important to an economy exports or foreign capital inflow?
I think exports reduces the Balance of payment while foreign capital inflow increases the Balance of payments.
What is more important to an economy-exports or foreign capital inflows?
I think exports reduces the Balance of payment while foreign capital inflow increases the Balance of payments.
What is balance of trade and payment?
Balance of payment is the difference between the money coming into the country and the money leaving the same country.
Elements of balance of payment?
Trade in goods Trade in service Imports and Transfer are the 4 main element of the balance of payment.
What are the effect of deficit in balance of payment in developing countries like Nigeria?
ways of controlling deficit balance of payment in nigeria
Why would it be useful to examine a country's balance of payment data?
why would it be useful to examine a country balance of payment data
What is Canada balance of trade and balance of payment?
Plus $85 billion
What is balance of payment of Pakistan 2011?
Balance of payments in pakistan in 2011
