International Finance related issues.
The Capital Account of the balance of payments measures all international economic transactions of financial assets. It is divided into two components:
+ The Capital Account
+ The Financial Account.
Capital Accounts consist of:
- Direct Investment – in which the investor exerts some explicit degree of control over the assets.
- Portfolio Investment – in which the investor has no control over the assets nor any participation in the management.
- Other Investment – consists of various short-term and long-term trade credits, cross-border loans, currency deposits, bank deposits and other capital flows related to cross-border trade.
DSR - Debt Service Ratio:
The Debt Service Ratio - DSR is the percentage of a borrower's income that will be used to pay off a loan. It is one of the factors a lender will use to assess your application. Most lenders set the maximum DSR from 30% to 30%, which means that the loan repayments should not take up more than that part of your salary. This ensures that you will be able to pay off your loan comfortably, with little to no risk of defaulting or going bankrupt. The DSR may be calculated based on your monthly, weekly or fortnightly earnings.