Question

State the meaning of accommodating items under Balance of Payments of India, with the help of an example.

Answer 1

1. Accommodating Items These are the transactions undertaken by the government in order to maintain the balance of payments (BOP) balance.
2. For example, if India imports significantly more than it exports, the central bank may use its reserves to stabilise the currency.
3. This move is an accommodating item since it addresses the economic imbalance.