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Because all items in the BOP must sum to 0, any imbalance in the B
(official settlement balance) must be financed (or paid for) through
official reserve flows
B + OR = 0
If overall balance B is surplus it means a debit in the official reserves
account (accumulation of official reserve assets or a decrease in
foreign official reserve holdings)
If overall balance B is deficit it means a credit in the official reserves
account ( a decrease in official reserves assets or an increase in
foreign official reserve holdings)
Int. Investment Position: a statement of the stocks of a nations
international assets and foreign liabilities at a point in time, usually at
the end of a year.
If a country has a current account surplus, it means its If is
positive; country is adding to its holdings of foreign financial
assets or decrease it foreign liabilities and vice versa
A country is a lender when its net stocks of foreign assets is
positive (flows) and a debtor when it is negative (holdings)