Balance of Payments and Foreign Exchange

Quick-reference summary — for full depth, see our detailed UPSC notes.

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📚 This topic is part of the national economy — read our full, in-depth write-up: Balance of Payments and Foreign Exchange →

📖 Quick summary

The Balance of Payments records a country's transactions with the world via the Current Account (trade, income, transfers) and Capital Account (investment, loans, reserves). India's 1991 forex crisis — reserves down to two weeks of imports — triggered the IMF loan and the 1991 economic reforms.

This national-framework topic is identical for TSPSC as it is for UPSC — for the full deep-dive with all the detail, follow the link above.

💡 Key Facts

BoP = Current Account + Capital Account.
1991: forex reserves ~2 weeks of imports → IMF loan → reforms.
RBI manages forex reserves and rupee stability.

🔖 60-Second Revision

CAD = imports > exports; financed via FDI/FPI inflows.