Balance of Payments Question (1 Viewer)

Ilikeapples

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Could anyone explain why a dividend is not recorded on the financial account and what it means when transactions in the current account are 'short-term' in nature, and what makes a dividend 'short-term'?
 

phat_tar

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A dividend is like a servicing cost so it goes in the NPI, the financial account only records investments e.g. portfolio/direct. A dividend is inherently short term because its a payment, an investment will sit in a foreign country for a while before being repatriated later when the asset is sold .
 

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