what are official reserve transactions????
why is "purchase of own currency a credit and sale of own currency a debit in BoP"????
Shouldnt it be the opposite??
Dear student,
Official reserve transactions refers to those transactions of the monetary authority that lead to a change in the official reserves. They are carried through sale or purchase of currency in the exchange market.
The purchase of country's own currency is a credit item in BOP. On the other hand, sale of own currency is debited.
Official reserve transactions refers to those transactions of the monetary authority that lead to a change in the official reserves. They are carried through sale or purchase of currency in the exchange market.
The purchase of country's own currency is a credit item in BOP. On the other hand, sale of own currency is debited.