SUPPOSE THERE IS SURPLUS IN THE BALANCE OF PAYMENT, HOW THE ACCOMMMODATING ITEMS CAN BE USED TO BRING THE BALANCE IN B.O.P?

Dear Student,
Accommodating items refer to the transactions that take place to cover deficit or surplus arising from the autonomous transactions. Accommodating items includes borrowing from abroad, withdrawal from foreign exchange reserves.
When there is surplus in the balance of payment, government will reduce borrowing from abroad and will give money to foreign countries as borrowing . And government will deposit more money in foreign exchange reserves.
In these ways , the accommodating items can be used to balance the surplus in balance of payment.
Hope this information will clear your doubts on this topic.
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