Is it better to have a surplus or a deficit in the balance of payments

The surplus is good, and exports are greater than imports.

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1. Balance of payments deficit.

Also known as the balance of payments deficit.

It refers to the fact that a country spends more than it earns in the balance of payments. The balance of payments deficit will lead to a decrease in the supply of foreign exchange in the domestic foreign exchange market (China's supply of foreign currency) and an increase in demand (China's demand for foreign currency), which will make the exchange rate of foreign exchange **, the exchange rate of the local currency**. If the country takes steps to intervene, i.e., sell foreign exchange and buy its own currency, it does not have enough foreign exchange reserves in its hands.

This, in turn, will further lead to the depreciation of the local currency. A country spends more than its income in the balance of payments, and the money earned by the export business is foreign exchange, and the import business needs to pay foreign exchange, and when the foreign exchange earned is not enough to pay the foreign exchange required for the import business, it leads to a shortage of foreign exchange.

Extended information: 1. When there is a deficit in the balance of payments, it is necessary to regulate and control. Policies to make up for the balance of payments deficit can be divided into two categories: subsidy and adjustment: (1) Subsidy policy:

The subsidy policy consists of a policy of reducing foreign exchange reserves and international borrowing. The subsidy policy is only suitable for short-term balance-of-payments deficits. The balance of payments deficit is affected by the money supply and interest rates, which are made up of the base money.

The determined base currency consists of the level of domestic credit and foreign exchange reserves. (2) Adjustment policy: For the long-term fundamental balance of payments deficit, there are generally three components of the joint adoption of funding policy and adjustment policy:

Spending reduction policies (including contractionary fiscal policy, contractionary monetary policy.

Expenditure transfer policies (including devaluation policies) and direct control policies (including tariffs, caps, multiple exchange rates, subsidies, etc.).

2. **Deficit.

The difference between the two and the balance of payments deficit can be known by comparing the respective conceptual contents:

The balance of payments deficit is a developing country.

One of the prevalent bottlenecks. A balance of payments deficit, also known as a balance of payments deficit, is when a country spends more than it earns in the balance of payments. The balance of payments deficit will lead to a decrease in the supply of foreign exchange in the domestic foreign exchange market and an increase in demand, which will make the exchange rate of foreign exchange **, the exchange rate of the local currency**.

If the country takes steps to intervene, that is, sell foreign currency and buy its own currency, it must have sufficient foreign exchange reserves in hand, which will further lead to the depreciation of the local currency. The intervention will directly lead to a decrease in the amount of the national currency, which in turn will lead to an increase in the level of domestic interest rates, leading to a decline in the economy and an increase in unemployment.

Balance of payments deficit.

Also known as the balance of payments deficit.

It refers to the fact that a country spends more than it earns in the balance of payments.

Balance of Payments Deficit Domestic Impact:

If the balance of payments deficit is caused by a current-account deficit, it will inevitably lead to a reduction in employment opportunities in export-related sectors, leading to an economic downturn.

If the deficit in the balance of payments is caused by a deficit in the financial and asset accounts, it means a large capital outflow, a shortage of domestic funds, and a rise in interest rates, leading to an increase in unemployment and a downturn in the economy.

The official website shall prevail.

In recent days, there has been a question about whether the balance of payments deficit and surplus will cause inflation.

The question has become a hot topic, and I will share my opinion. Let's start with thatDeficitWhat is the meaning. That is, taking us and the United States as an example, the United States and China every year make more money from selling to the United States, and more money than the United States sells to China, which is a deficit for the United States.

The other way aroundSurplusEvery year, the United States and China make more money than the United States sells to China, which is more than the money that the United States sells to China, which is a surplus for China. These two behaviors are mutually beneficial behaviors and will not cause inflation normally. So what's going on?

Let me share my thoughts with you.

One. Deficit First of all, let's understand what deficit means. That is, taking us and the United States as an example, the United States and China every year make more money from selling to the United States, and more money than the United States sells to China, which is a deficit for the United States. <>

Two. On the other hand, the surplus between the United States and China every year is the money that China sells to the United States, which makes more money than the United States sells to China, which is the surplus for China. In this way, China is constantly making money from the United States, and the role of the United States is more like a buyer, and China is more like a seller.

This will make the United States have less money and China will have more money. <>

Three. Whether or not it causes inflation is a mutually beneficial behavior, and normally it will not cause inflation. Inflation is mainly due to the issuance of too much money to cause inflation, and if it is mutually beneficial, I think the ** of goods should reduce inflation. <

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It will cause inflation, and in the case of a deficit and surplus in the balance of payments, it will make the goods in the market unable to meet the demand, which will cause inflation.

There is a possibility of inflation, as this situation is likely to lead to a change in economic conditions and is likely to affect the development of the market, so there is a possibility of inflation.

It is very likely, because the economic problems are very profound, and it is normal for any small link to change to cause inflation.

It will also cause inflation, but as long as it is strictly controlled, such a situation will not have a particularly big impact.

If a country's balance of payments is in deficit, it will generally cause the exchange rate of its own currency to fall first, and if the deficit is serious, it will cause the exchange rate of the local currency to rise sharply. If the country's monetary authorities want to maintain the status of their currency, they need to intervene in the foreign exchange market, i.e., sell foreign exchange and buy the national currency. This will not only deplete foreign exchange reserves, but even cause them to dry up, thereby seriously weakening its ability to pay externally. In addition, it will also create a domestic monetary tightening situation, which will lead to an increase in the level of interest rates, which will affect the growth of the domestic economy, which will lead to an increase in unemployment and a relative and absolute decline in the growth rate of national income.

Answer: The balance of payments refers to the systematic record of the total amount of revenue and expenditure caused by all economic transactions of a country with foreign countries in a certain period of time, which is an important factor affecting short-term changes in the exchange rate.

When there is a surplus in the balance of payments, there is an oversupply of foreign exchange, and the ratio of foreign currencies to domestic currencies falls. When there is a deficit in the balance of payments, the monetary debt payable by the country is greater than the monetary debt receivable, and the ratio of foreign currency to domestic currency will rise and the domestic currency will depreciate.

In the balance of payments, the data of the international ** is more important. If the surplus grows, the confidence of the national currency in the international market, as well as the demand, will increase, which will lead to an increase in the exchange rate; On the contrary, if the large ** deficit continues to increase, the market's confidence and demand for the currency will decrease, which will eventually lead to the depreciation of the currency. The continuous deficit or deficit of foreign trade figures has increased significantly, and the impact on market psychology is the strongest.