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Balance of payment, or BOP for short, is a statement that includes all the monetary transactions done by the residents (as individuals, companies, or governmental institutions) of a particular country with the rest of the world in a specific period, usually a quarter or a year. The BOP is divided into three main accounts which are:
1. The current account, which records all the exports and imports of the country.
2. The financial account, which records financial transactions like direct & portfolio investments and reserve assets.
3. The capital account, which records capital transfers such as grants, foreign aid, debt forgiveness or intangible assets.