Balance of Payments (BoP)

The Balance of Payments (BoP) is a comprehensive accounting statement that records all economic transactions between residents of a country and the rest of the world over a given period. It consists of two main accounts: the Current Account (recording trade in goods, services, income, and transfers) and the Capital and Financial Account (recording investment flows — FDI, FII investments, loans, and reserve movements). A BoP surplus means more money is flowing into the country than out, supporting the domestic currency; a deficit means the opposite. India's BoP position is published quarterly by the RBI and is a critical indicator of the country's overall external financial health, Rupee stability, and foreign exchange reserve adequacy.