Capital and Financial Transactions Account

The international movement of goods and services recorded in the current account of the balance of payments must be financed in some way. Financing is shown within several groups of balance of payments items, which are sometimes simplified as the balance of capital flows.

Capital and financial account balance is a group of balance of payments items that record the international movement of capital through which exports and imports of goods and services are financed.

Structurally, as shown in Table 2.1 (continued), the capital and financial transactions accounts comprise two main categories:

capital account – a group of balance of payments items fixing capital transfers and the acquisition / sale of non-produced non-financial assets; financial account – a group of items of the balance of payments covering all operations as a result of which there is a transfer of ownership of external financial assets and liabilities of a given country.