bop illustration

1. INTERNATIONAL FINANCIAL
MANAGEMENT
PROBLEMS ON BALANCE OF PAYMENT
BY
V S SARMA ,PROF, MBA
VIDYA JYOTHI INSTITUTE OF TECHNOLOGY
1

2. INTERNATIONAL FINANCIAL MANAGEMENT
BALANCE OF PAYMENT (BOP)
 From the following information of India, prepare the statement of
BOP component wise: (Rs in crores)
 Exports : 1418.64
 Imports : 1809.18
 Unilateral transfers from India to other countries : 64.39
 Unilateral transfers to India from other countries : 10.24
 Direct Investments by India : 152.44
 Direct investments by other countries in India : 287.68
 Portfolio Investment by India : 124.94
 Portfolio investment by other countries in India : 474. 39
 Other investments by India : 303.27
 Other investments by other countries in India : 262.64
 Statistical discrepancy (credit) : 0.732

3. INTERNATIONAL FINANCIAL MANAGEMENT
BALANCE OF
PAYMENT
(BOP)
BALANCE OF PAYMENT FOR
THE YEAR 2012-13
3
Credit Debit
ANSWER:
1) Current Account:
(a) Exports 1418.64
(b) Imports -1809.18
(c) Unilateral Transfers 10.24 - 64.39
Trade deficit (A) - 444.69
2) Capital Account :
(a) Direct Investments 287.68 - 152.44
(b) Portfolio Investments 474.39 - 124.94
(c) Other Investments 262.64 - 303.27
Capital surplus (B) 444.06
3) Statistical Discrepancy (C ) 0.73
4) Official reserve account (D) 0
5) Investment of over all surplus (E)
BOP = A-(B+C=D)-E = 444.69-(444.06+0.73- 0.10 ) = 0
- 0.10

4. INTERNATIONAL FINANCIAL MANAGEMENT
Q. From the following information of India, prepare the statement of BOP component wise:
(Rs in crores)
 Exports:
 Merchandise : 811.10
 Services: : 336.10
 Factor income : 369.00
 Imports:
 Merchandise : 1473.10
 Services : 291.10
 Factor income : 344.90
 Unilateral transfers from India to other countries : 89.40
 Unilateral transfers to India from other countries : 16.40
 Direct Investments by India : 248.50
 Direct investments by other countries in India : 115.50
 Portfolio Investment by India:
 Equity securities : 93.00
 Debt securities : + 2.20
 Portfolio investment by other countries in India
 Equity securities : 57.60
 Debt securities : 736.80
 Other investments by India : 483.70
 Other investments by other countries in India : 524.30
 Statistical discrepancy (credit) : 51.98
4

5. INTERNATIONAL FINANCIAL MANAGEMENT
ANSWER: (BOP PROBLEM)
5
CURRENT ACCOUNT credit debit
(1) EXPORTS 1516.20
(1.1) Merchandise 811.10
(1.2) Services 336.10
(1.3) Factor Income 369.00
(2) IMPORTS - 2109.10
(2.1) Merchandise - 1473.10
(2.2) Services - 291.10
(2.3) Factor income - 344.90
(3) UNILATERAL TRANSFERS 16.40 - 89.40
Balance of current account - 665.90

6. INTERNATIONAL FINANCIAL MANAGEMENT
ANSWER:
6
credit debit
Balance of current account (b/f) -665.90
CAPITAL ACCOUNT
(4) Direct investment 115.50 -248.50
(5) Portfolio investments
(5.1) Equity securities 57.60 - 93.00
(5.2) Debt services 736.80 +2.2
(6) Other investments 524.30 - 483.70
Balance of capital account 611.20
(7) Statistical discrepancy 51.98
(8) Over all balance -2.8
(9) Official reserve 2.8