What is the exchange balance?

In international markets, the exchange balance refers to the statistical record of transactions in foreign exchange that are carried out through intermediaries in the exchange market. This balance is used by the Banco de la Rep├║blica de Colombia, as an instrument to describe the external sector in the short term, due to the frequency with which the relationship between monetary records and accounts is published. Thanks to it, permanent data and indicators can be obtained about the global situation of the external sector in a country.

We can find certain similarities between the exchange balance and the balance of payments, since commercial operations, capital movements and also the import or export of services are related.

However, there are differences between the two concepts. On the one hand, the balance of payments includes, among others, economic transactions between residents of a country and abroad (both goods, services, income, transfers and operations that the international assets and liabilities of economies have to vary); on the other hand, the exchange balance only includes operations of real or financial resources that imply an immediate income or payment.

Many treat this concept as a foreign currency box rather than a scale or register. That is, it is in charge of saying that it is the availability of liquidity in foreign currency that one country has over another, according to the accounting that exists between both.

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