Related introduction:
The balance of payments surplus indicates a net inflow in the current account and the capital account. Taking trade in goods as an example, the current account surplus shows that the country's exports are greater than its imports. Foreign countries need to pay in domestic currency instead of foreign currency when importing domestic goods, which will lead to an increase in demand for domestic currency.
Extended data
The balance of payments surplus generated by trade projects reflects the enhancement of a country's international reserve or external payment ability; The balance of payments surplus generated by the capital account reflects a large inflow of capital.
The huge surplus of international payments also has adverse economic effects, mainly in the following aspects: excessive foreign exchange reserves will cause idle waste of funds, which is not conducive to domestic economic development; When the exchange rate of reserve currency falls, foreign exchange reserves will suffer losses; With the increase of a country's foreign exchange reserves, the issuance of local currency will inevitably increase accordingly, thus generating potential inflationary pressure.
In the case of high capital mobility, the balance of payments surplus has strengthened the effect of active fiscal policy to stimulate aggregate demand and promoted the rapid development of the national economy. Fourth, the balance of payments surplus is conducive to the country's loose monetary policy.
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