What is balance of payments account? Where are the borrowings from abroad recorded in it and why?
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Balance of Payments account is a record of a country's sources and uses of foreign exchange.
Borrowing from abroad is recorded in 'Loans', subcomponent of the capital account. This is so, because, the capital account shows all the inflows and outflows of capital. In this given case capital is inflowing from R.O.W. to India. So it is included in the capital account.
Borrowing from abroad is recorded in 'Loans', subcomponent of the capital account. This is so, because, the capital account shows all the inflows and outflows of capital. In this given case capital is inflowing from R.O.W. to India. So it is included in the capital account.
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