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There has been net outflow of portfolio investment to the tune of US$ 6.5 billion
as against net inflow of US$ 9.8 billion in Q2 of last year; outflow was more
evident in the equity segment.
Foreign exchange reserves (on BoP basis) decreased by US$ 0.9 billion in Q2 of
2015-16.
Though the credit and debit are written
balanced in the balance of payment account,
it may not remain balanced always. Very
often, debit exceeds credit or the credit
exceeds debit causing an imbalance in the
balance of payment account. Such an
imbalance is called the disequilibrium.
Disequilibrium may take place either in the
form of deficit or in the form of surplus
POPULATION GROWTH
NATURAL FACTOR
DEMONSTRATION EFFECT
CYCLICAL FLUCTUATIONS
FLIGHT CAPITAL
BOP accounts will always balance when all types of
payments are included, imbalances are possible on
individual elements of the bop, such as the current
account, the capital account. Disequilibrium of
deficit arises when our receipts from the foreigners
fall below our payment to foreigners. it arises when
the effective demand for foreign exchange of the
country exceeds its supply at a given rate of
exchange. this is called an 'unfavourable balance'.
Solution to correct balance of payment disequilibrium
lies in earning more foreign exchange through
additional exports or reducing imports. quantitative
changes in exports and imports require policy
changes. such policy measures are in the form of
monetary, fiscal and non-monetary measures
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