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An extraction from the balance of payments for the current year shows that your country has...

An extraction from the balance of payments for the current year shows that your country has undergone a deterioration in its net international investment position. Suppose you are part of the policy analysts discussing the pros and cons of such a change, what would be your arguments?

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Answer #1

The pros would be savings on forex reserves and spending on domestic aseets which helps in donestic growth. It also saves from global risks and uncertainty for nation.

However it has its own cons as it enlarges single country single currrncy risks snd leads to lowsr diversification which leads to lossess in long run. Moreover it leads to overlapping of investment within single geographical region and any domestic unrest may cause sharp decline in overall value.

PLEASE UPVOTE INCASE YOU LIKED THE ANSWER WILL BE ENCOURAGING FOR US THANKYOU VERY MUCH ALL THE BEST IN FUTURE

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