ABSTRACT
The official reserve transaction balance shows an adjustment to be made in official reserves for the
balance of payments
to balance.
OFFICIAL SETTLEMENTS BALANCE
Also called
overall balance
or
net liquidity balance
, the official settlements balance is the bottom line
balance of payments
when all private sector transactions have been accounted for and all that remain are official exchanges between central banks (and the
IMF
). It is equal to changes in short-term capital held by foreign monetary agencies and official reserve asset transactions. This balance is a comprehensive balance often used to judge a nation’s overall competitive position in terms of all private transactions with the rest of the world. Exhibit 83 summarizes this and other commonly used balance of payments measures.
