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What are the main ways to eliminate the balance of payments surplus or deficit?
Ways to eliminate a country's balance of payments surplus or deficit mainly include:

(1) When the exchange rate remains unchanged, the solution to the foreign exchange payment surplus can be to reduce imports or increase exports.

(2) Under the condition of constant exchange rate, the solution to the foreign exchange payment deficit can be to increase imports or reduce exports.

(3) Adjust domestic interest rates. Under the condition of open economy, there is a direct positive correlation between exchange rate and domestic interest rate. Raising domestic interest rates will attract international capital into the country, which is expected to narrow the balance of payments deficit; Lowering domestic interest rates will promote international capital outflow, which may reduce the balance of payments surplus.

(4) Intergovernmental loans. Countries with balance of payments deficits can request credit support from other countries or international economic organizations to make up for the payment gap. Countries with a surplus in the balance of payments can also lend their surplus funds to other countries to avoid the adverse impact of the rise of the local currency exchange rate on exports.

(5) Implement foreign exchange control. Controlling the exchange rate of foreign exchange and prohibiting the free entry and exit of foreign exchange is effective in the short term, but it will affect economic development in the long run because it damages the market mechanism.

(6) Adjust the exchange rate. That is, countries with a deficit in international payments announce the depreciation of their currencies to stimulate exports and reduce imports; Countries with surplus balance of payments adopt the method of currency appreciation to reduce exports and increase imports.

(7) The government can also use the open market to buy and sell foreign exchange in order to stabilize short-term exchange rate fluctuations. That is, in the case of exchange rate appreciation, the central bank throws out foreign exchange and buys local currency, which makes the foreign exchange rate fall; Instead, they buy foreign exchange and sell local currency, which makes the foreign exchange rate rise.