You are given the following information about a country’s international transact
ID: 1209280 • Letter: Y
Question
You are given the following information about a country’s international transactions during a year:
Item
Value ($ millions)
Exports
526
Imports
402
Net Income from Foreigners
3
Net Unilateral Transfers
-8
Net Increase in the Country's Holding of Foreign Assets (excluding official reserves)
202
Net Increase in Foreign Holdings of the Country's Assets (excluding official reserves)
102
Net Statistical Discrepancy
4
A) Please calculate the country’s net exports.
B) Please calculate the country’s current account balance.
C) Please calculate the country’s official settlements balance.
D) What is the value of the net change in official reserves assets? Is the country increasing or decreasing its net holdings of official reserve assets?
Item
Value ($ millions)
Exports
526
Imports
402
Net Income from Foreigners
3
Net Unilateral Transfers
-8
Net Increase in the Country's Holding of Foreign Assets (excluding official reserves)
202
Net Increase in Foreign Holdings of the Country's Assets (excluding official reserves)
102
Net Statistical Discrepancy
4
Explanation / Answer
A) the country’s net exports or balance of trade = Exports - Import i.e. 526 - 402 =24
B) country’s current account balance is sum of the balance of trade , net income from abroad and net current transfers. i.e., 24 + 3 - 8 => 19
C) country’s official settlements balance = Current Account + Capital Account ( change in foreign and domestic ownership of assets ) + statistical discrepancy
= 19 + 202 -102 => 119 + 4 = 123
D) The net change in official reserves assets = 202 -102 =100
The countryis increasing its net holdings of official reserve assets
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