This chapter explain how currencies of different nations are exchanged when international transactions take place, analyze the balance sheet the United States uses to account for the international payments it makes and receives, discuss how exchange rates are determined in currency markets, describe the difference between flexible exchange rates and fixed exchange rates, Identify the causes and consequences of recent record-high . trade deficits. | Balance of payments Instructor: Abbas Course code: ECO 400 Lecture 31 Lecture Outline Composition of BOP Pakistan’s BOP Causes of BOP imbalance Some theoretical Aspects It’s a comprehensive record of eco transactions of the residents of a country with the rest of the world during a given time period. It’s a tabulation of the credit and debit transactions of a country with foreign countries and international institutions. Statistics Department of State Bank of Pakistan is responsible to compile Pakistan’s Balance of Payments Statistics (BOP) as per IMF format (BPM5) Why is it important ? Its main aim is to provide the government information about the international eco position of the country and to help make decisions about monetary and fiscal issues, on one hand, and about trade and payments on the other. Government authorities are constant users of balance of payments and other statistics in carrying out their responsibilities of monitoring economic activity, . | Balance of payments Instructor: Abbas Course code: ECO 400 Lecture 31 Lecture Outline Composition of BOP Pakistan’s BOP Causes of BOP imbalance Some theoretical Aspects It’s a comprehensive record of eco transactions of the residents of a country with the rest of the world during a given time period. It’s a tabulation of the credit and debit transactions of a country with foreign countries and international institutions. Statistics Department of State Bank of Pakistan is responsible to compile Pakistan’s Balance of Payments Statistics (BOP) as per IMF format (BPM5) Why is it important ? Its main aim is to provide the government information about the international eco position of the country and to help make decisions about monetary and fiscal issues, on one hand, and about trade and payments on the other. Government authorities are constant users of balance of payments and other statistics in carrying out their responsibilities of monitoring economic activity, formulating recommendations an appropriate balance of payments and domestic economic policies and evaluating various economic strategies. Regional balance of payments statistics are used both by the Pakistan’s authorities and by the authorities of partner countries to monitor developments in economic relations between Pakistan and those countries or specific country grouping. Pakistan’s balance of payments is used by academic and business observers as well as by policy maker around the world in monitoring developments in the worldwide payments position and in comparative studies of trends in the balance of payments of various countries. BOP data is also used by international bodies such as IMF, World Bank and other external stakeholders etc. Why is it important ? Composition of BOP Current Account: deals with the trade transactions of goods and services, international services (tourism, transportation) and unilateral transfers (gifts and foreign aid). Capital Account: consists of direct .
