Balance of Payments Q (1 Viewer)

[HashtagManthan]

If Australia borrows money from overseas, exactly where is this injection of money recorded in the Capital and Financial Account?

Also, if overseas invest in Aus banks due to high interest rates, exactly where is this money recorded in the Capital and Financial Account?

ty boys

 

[muntchuriancandidate]

It depends what you mean by 'borrowing'. In a sense any form of capital inflow for investment is reversible and therefore can be seen as borrowing.
However if you are just talking about loans that aren't for purchasing land, shares (portfolio), then they are probably just in the 'other investment' category. Same with your second example, if this is for a specific purpose e.g. they are buying shares (direct or portfolio) in order to invest or purchasing derivatives (financial derivatives category) then they are in that specific category, but simply depositing in a foreign bank is also probably going to fall under 'other investment'