Discussion
Which of the following is not the item of current account of balance of payment ?
Answer: D
The item that is not in the current account is external borrowings.
The current account of the balance of payments records transactions that do not create claims for the future: exports and imports of goods (the trade balance), trade in services, primary income such as interest, dividends and wages, and transfers such as remittances.
External borrowings, such as loans taken from abroad and their repayment, create liabilities and belong to the capital (financial) account. The interest paid on them, however, is a current account item, which is why interest payments, import of services and export of goods are all current account entries.
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