Autonomous and accommodating transaction dating doug bruce julie imada
Autonomous transactions are the transactions between the residents of two countries which take place due to the consideration of profit.
The sources used to meet a deficit in BOP, are: (i) Foreign exchange reserves; (ii) Borrowings from IMF or foreign monetary authorities.
These refer to transactions that take place to cover deficit (or surplus) arising from autonomous transactions.
These items are also called ‘below the line items’.
Therefore, those items relating to international economic transaction which are motivated by profit consideration are autonomous item such as import and export of goods and services and inflow and outflow of capita items.
Autonomous items are independent of the state of the country’s balance of payments.
These are also known as ‘above the line items’ and take place in both the accounts of Bo P, i.e. These are undertaken to maintain balance in the Bo P account.