Balance of payments

The complete record of a country's transactions with the rest of the world, split into the current account, the capital and financial account, and the change in reserves.

The accounts balance by construction, which is the useful property: a current account deficit must be matched by capital inflows or by running down reserves.

That identity is what makes the data analytically powerful. It converts a question about the currency into a question about who is funding the gap and how stable that funding is.

Portfolio flows can reverse in a week. Direct investment cannot.