Service exports Service imports Merchandise exports $346 $354 $480 Merchandise imports $348 Income flows, net $153 Gifts to foreigners -outflow $ is leaving so -NEG Increase in the country's holding of foreign assets, net $142 $352 (Excluding official reserves assets) outflow Your country is investing abroad (outflow). Increase in foreign holdings of the country's assets, net (Excluding official reserves assets) inflow $252 Foreigners are investing in your country (inflow). Statistical discrepancy, net credit $154 Calculate the official settlements balance and the current account balance. Is the country increasing or decreasing its net holdings of official reserve assets? Why? 1st calculate 30. Net Export Export-Imports CA=NX+NHNUT = (480 + 346)-(348+354)=$124 million = 124 + 153+ (-142)=$135 million 2nd calculate OSB=CA + FA FA can be found in inflow FA=252-352-$-100 million FA=-100 Official Statistical Balance OSB-CA + FA OSB 135+(-100 = $35 million CA + FA +OR+ SD =0 35 +OR+ 154=0 OR = -$189 Million ->189 Million-> flows out of country to purchase international reserves (euro, points, yen) Holdings of reserves /^ OSB=Official Settlements Balance