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INTERNATIONAL BALANCE OF PAYMENTS

LEARNING OBJECTIVES

After reading this chapter, you should be able to:

  • Discuss the fundamentals of the balance of payments of a country
  • Understand the different components of the balance-of-payments account
  • Explain the concept of equilibrium and disequilibrium in a country’s balance-of-payments account
  • Understand the significance of the official reserves account in balance of payments accounting
  • Be conversant with trends in India’s balance-of-payments account over the years
INDIA’S BALANCE OF PAYMENTS CRISIS

The Indian economy faced a balance of payments crisis in July 2013 as its foreign exchange reserves touched a low of USD 280 billion—enough to cover only seven months of imports. India has traditionally ...

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