The official reserve transaction balance shows an adjustment to be made in official reserves for the

balance of payments

to balance.


Also called

overall balance


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


). 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.