Where is ‘borrowings from abroad’ recorded in the Balance of Pay

1.	Where is ‘borrowings from abroad’ recorded in the Balance of Payments Accounts? Give reasons.
Answer» 1. Borrowing from abroad is a part of Capital Account. 2. Borrowing from abroad can be private transactions or official transactions. 3. For example, (a) All transactions relating to borrowings from abroad by private sector are recorded on the positive (credit) side as it is inflow of foreign currency. (b) Similarly, transactions relating to borrowings from abroad by government sector are recorded on the positive (credit) side as it is inflow of foreign currency.

Where is ‘borrowings from abroad’ recorded in the Balance of Payments Accounts? Give reasons.

Answer»

1. Borrowing from abroad is a part of Capital Account.

2. Borrowing from abroad can be private transactions or official transactions.

3. For example,

(a) All transactions relating to borrowings from abroad by private sector are recorded on the positive (credit) side as it is inflow of foreign currency.

(b) Similarly, transactions relating to borrowings from abroad by government sector are recorded on the positive (credit) side as it is inflow of foreign currency.

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Where is ‘borrowings from abroad’ recorded in the Balance of Payments Accounts? Give reasons.

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