Devaluation occurs when a government lowers the official exchange rate of its national currency. This means the currency becomes cheaper compared to other foreign currencies.

In the globalized world we live in, understanding a nation’s economic interactions with the rest of the world is paramount. Enter the Balance of Payments (BOP) – an essential financial statement encapsulating a nation’s transactions with the world. This article aims to elucidate the BOP, detailing its types, significance, and how it shapes a nation’s economic strategies. Let’s embark on this journey to unravel the intricacies of India’s financial engagements on the global stage.

Welcome to the world of economics where the term “Balance of Payments” is a crucial pillar determining a country’s financial health on the global stage. It’s a reflection of the monetary transactions a nation has with the rest of the world. This article is your guide to unraveling the intricacies of Balance of Payments (BoP) in a simple and approachable manner. From its components and significance to its role in shaping national policies, we will journey through this financial landscape.