Answer:
The deficit in the BOP is governed by the balance of autonomous transactions in the BOP. Autonomous items refer to those international economic transactions that are undertaken with the sole motive of earning profit. The BOP would show a deficit if the autonomous receipts are lesser than the autonomous payments. As autonomous receipts implies a receipt of foreign exchange and autonomous payments implies a payment of foreign exchange, so, it can be said that BOP would show a deficit if the foreign exchange receipts are less than foreign exchange payments. In other words, the BOP deficit would be reflected in a depletion of foreign exchange reserves of the country.
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