Often abbreviated to BOP, balance of payments refers to an accounting of a particular country’s transactions with all other nations over a specified period of time. BOP accounts for imports and exports as well as spending by tourists, private investing, and investment and trade between banks. If funds coming into the country exceed those going out, the BOP is said to be positive (or a BOP surplus). This results in the country’s currency having a strong exchange rate. On the other hand, a negative BOP (a BOP deficit) results in a currency with a weak exchange rate in the international market.
The World Trade Organization is involved in resolving problems and issues related to BOP; this is among the issues that have created controversy about the WTO.