- The Country P Had A Current Account Deficit Of 1 Billion And A Non Reserve Financial Account Surplus Of 500 Million In 1 (38.24 KiB) Viewed 68 times
The country P had a Current Account Deficit of $1 billion and a Non-Reserve Financial Account Surplus of $500 million in 2008. a. What was the Balance of Payments of country P in that year? What happened to the Country's Net Foreign Assets? b. Assume that Foreign Central Banks neither buy nor sell country P assets. How did the country P Central Bank's Foreign Reserves change in 2008? How would this Official Intervention show up in the Balance of Payments Accounts of Country P? c. How would your answer to (b) change if you learned that Foreign Central Banks had purchased $600 million of Country P assets in 2008? How would these official purchases enter Foreign Balance of Payments Accounts? d. Draw up the country P Balance of Payments Accounts for 2008 under the assumption that the event described in (c) occurred in that year.