A comprehensive accounting record of all economic transactions between the residents of a country and the rest of the world over a defined period, typically a quarter or year. The balance of payments is divided into the current account (trade in goods and services, income, and transfers), the capital account (capital transfers and non-financial assets), and the financial account (investment flows). Persistent imbalances in the balance of payments can place pressure on a nation's currency and influence central bank policy decisions.
Example
“The country's widening balance of payments deficit, driven by rising imports and falling foreign investment, contributed to a 5% depreciation of its currency over the quarter.”