Understanding the Capital Account for Forex Traders
The capital account is a fundamental component of the balance of payments, which tracks the flow of money into and out of a country
The capital account is a fundamental component of the balance of payments, which tracks the flow of money into and out of a country
The balance of payments is a systematic record of all economic transactions conducted by a country with the rest of the world
Petrodollars refer to the revenues earned by oil-exporting countries through the sale of petroleum. These revenues are typically denominated in U.S. dollars, as oil is predominantly traded in this currency
Financial contagion refers to the spread of financial distress, shocks, or disruptions from one market or institution to others. It is characterized by the rapid transmission of negative economic events, such as a crisis or downturn, across interconnected financial systems
The current account is a record of a country’s transactions with the rest of the world in goods, services, income, and current transfers
Petrodollars are a significant component of the global financial system. When oil-exporting countries receive payments in US dollars
Central Bank Digital Currency, or CBDC, refers to a digital form of currency issued and regulated by a country’s central bank
A currency basket refers to a collection of currencies that are grouped together to represent a specific market or economic region
The financial instability hypothesis is a concept developed by economist Hyman Minsky. It posits that in a capitalist economy, stability can breed instability
The Net International Investment Position (NIIP) represents the difference between a country’s external assets and liabilities at a specific point in time