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: Explain how a country’s balances of payment directly affect the exchange rate.

: Explain how a country’s balances of payment directly affect the exchange rate.
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Under an adaptable exchange rate system changes in BOP can influence the exchange rate . As we probably am aware the BOP is comprise of both present and capital record. In current record exchange products and ventures are being recorded and in capital record exchange in resources and distinctive money related exchange are being recorded. if there is overflow in current record that implies send out is more than import of the nation then it naturally makes the nation of origin incentive to go up and the exchange rate increments and the other way around. Along these lines the BOP record can influence exchange rate.

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