GENERAL KNOWLEDGE

Detailed explanation-1: -Foreign investment, such as FDI and FPI, immovable properties, intangible assets, trade credits, borrowings from other nations, banking capital, and changes in the foreign exchange reserve are all components of the capital account.

Detailed explanation-2: -Capital account of BOP records all those transactions, between the residents of a country and the rest of the world, which cause a change in the assets or liabilities of the residents of the country or its government. It is related to claims and liabilities of financial nature.

Detailed explanation-3: -Capital account shows the net change in the physical or financial asset ownership for a country. It includes Foreign Direct Investment, Portfolio Investment, foreign loans, changes in reserve account etc. Private remittances come under Current account and not Capital account.

Detailed explanation-4: -A country’s Balance of Payments (BOP) consists of current account, capital account and official settlement account. The Foreign Direct Investment (FDI) inflows are reported under the capital account of BOP.