Current Account

Summary of Current Account

An entry in a nation’s balance of payments accounts reflecting the purchase of goods or services for consumption immediately or in the near future. See Balance of Payments.

(Main Author: William J. Miller)

Current Account and International Trade Economy

In relation to international trade economy, Christopher Mark (1993) provided the following definition of Current Account: The portion of a country’s balance of payments that records “visible” trade (exports and imports of goods), “invisible” trade(income and expenditures for services), interest payments, and transfer payments such as foreign aid. A current account deficit is essentially offset and financed by acapital account surplus — representing a net inflow of investment funds –and conversely, a current account surplus will be matched by a capital account deficit. Any gap remaining between the current and capital accounts is bridged by changes in official reserves (recorded in the official settlements balance).

Current Account in International Trade

Meaning of Current Account, according to the Dictionary of International Trade (Global Negotiator): The part of a country’s balance of payments that records current (as opposed to capital) transactions, including visible trade (income and expenditures for services), profits earned from foreign operations, interests and transfer payments. See balance of payments.

Description of Current Account

In this reference work, current account is a sort of the Banking category.

Resources

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