Related to BOP a/c If there is exchange of investment income it will be counted in current account measure. If there is a flowof funds for (debt and equity investment) it will be counted in capital account measure. Whats difference between these two ? Can someone please explain with one example ?
Interest income/cost, import and exports, unilateral transfer = current account Principal borrowing (debt) or Foreign direct investment (equity) = capital account currency reserves, special IMF drawings, gold reserves= official reserve account Current account + capital account + official reserves = 0