RECENT developments indicate that the country’s balance of payments (BoP) is increasingly sensitive to changes in portfolio flows and risk-on/risk-off episodes, Nomura said in a report released on Monday.
The BoP — a summary of a country’s transactions with the rest of the world for a specific period — was said to have undergone two structural changes over the past 10 years: a shift to a current account deficit (CAD) and a larger capital and financial account surplus driven by external loans made by the government.
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