Question

Find the balance on the balance of payments account. Is the overall balance of payments balanced?

$\begin{array}{ccc}\text{Items}& & \text{(Rs in lakhs)}\\ \text{(i) Capital account balance}& & (-)400\\ \text{(ii) Value of imports}& & 150\\ \text{(iii) Value of exports}& & 450\\ \text{(iv) Unilateral transfers}& & 100\\ \text{(v) Balance of visible trade}& & 200\end{array}$

Answer 1

Balance on the Balance of Payments Account

= Value of exports - Value of imports + Unilateral transfers + Capital account balance

= Rs 450 lakhs - Rs 150 lakhs + Rs 100 lakhs + (-) Rs 400 lakhs

= 0