International Transactions Recording Systems Course on Balance of Payments and

1. International Transactions Recording Systems Course on Balance of Payments and International Investment Position Manual (BPM6) IMF-PFTAC Nadi November 22-December 1, 2010 DM04

2. Introduction • History of ITRS • How an ITRS works • What ITRS cannot measure • Characteristics of a good ITRS • An example of a recent attempt to introduce such a system

3. History of ITRS • ITRSs were common place when only banks could hold foreign exchange • Through a bank a person or business makes a payment or surrenders (receipt) forex • Payment = BOP debit • Receipt = BOP credit • Classifying payments and receipts (transactions) provides a complete BOP statement.

4. How an ITRS works • Bank and client capture and classify transactions between residents & nonresidents • Transactions and bank balances are reconciled • Nonbank transactions & positions are captured elsewhere • Good quality control procedures used

5. What an ITRS cannot measure • Unless special arrangement are made an ITRS cannot measure • Intercompany transactions • Gross transactions underlying net transactions • Transactions in domestic currency • Transactions in kind • Transactions financed by loans and trade credit • The level of investment

6. Characteristics of a good ITRS • BOP compiler can access transactions data • Transactor is identifiable • Bank transactions and positions reconciled • BOP compiler has access to bank staff & transactors • Banks responsive and flexible • Procedures exist to measure nonbank transactions and positions

7. An example

10. Making arrangements to capture data • How might we make arrangements to capture? • Intercompany transactions • Gross transactions underlying net transactions • Transactions in domestic currency • Transactions in kind • Transactions financed by loans and trade credit • The level of investment