Current Account vs Financial Account: An Overview for Forex Traders

4 min read

A current account is an account in the balance of payments that records the value of the goods and services that are exchanged between a country and the rest of the world. Financial accounts, on the other hand, involve movement of global financial assets and liabilities and represent the net inflow or outflow of funds related to a country’s international financial transactions. For example, an individual with an open currency account will be trading in foreign exchange through financial accounts. On the other hand, a company involved in global cross border transactions will be using current accounts. Both current and financial accounts are necessary for the international trading of goods and services.