This financial metric captures the dynamic flow of capital between a country and nonresidents by detailing the
net changes in financial assets and liabilities. It provides essential insights into how a nation manages its financing activities, revealing whether it is primarily a net lender or borrower in the global arena. By equating to the combined outcomes of current and capital accounts, it reflects broader economic transactions and external economic relations. Measured in current U.S. dollars, this indicator plays a critical role in evaluating a country's financial health, investment attractiveness, and potential vulnerabilities amidst fluctuating global financial conditions, enabling policymakers and investors to make informed decisions.
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