International payments imbalances could lead to changes in import and export trade, currency issues, as well as changes in currency exchange rates, which directly affect a country's economic development and people's living standards.
Judging from these two aspects, namely the balance of payments surplus and the international balance of payments deficit
The impact of the balance of payments surplus
A country's international balance of payments surplus, of course, to increase their foreign exchange reserves, to strengthen its external payments, but also have adverse effects are as follows:
1. The national currency exchange rate will generally rise, and not conducive to the development of its export trade, thereby increasing the domestic unemployment problem.
2. Surplus to increase the domestic gold and foreign exchange reserves, but also make their own money supply growth, and add to inflation.
3. It would also exacerbate international friction. Because a country's international balance of payments surplus occurs, the balance of payments means that the occurrence of the deficit countries will lead to the other party to take retaliatory measures.
4. For developing countries, often to form the balance of payments surplus was due to the formation of excessive export trade surplus, it means that the reduction of domestic availability of resources, which is not conducive to the economic development of developing countries.
The impact of the international balance of payments deficit
A country's international balance of payments deficit, the general will cause the national currency exchange rate to float downward; such as a serious trade deficit, the currency exchange rate will fall sharply. If the monetary authorities of the country unwilling to accept the consequences of this, it is necessary to intervene on the foreign exchange market, that is sold to buy foreign exchange and local currency. The foreign exchange reserves will be consumed, or even result in the depletion of foreign exchange reserves, which seriously weakened the capacity of its external payments; On the other hand will be the formation of the monetary tightening of domestic situation, the level of interest rates to rise, the impact of national economic growth and unemployment and national income growth rate of the increase in the relative and absolute decline.
From the international balance of payments deficit for the formation of the specific reasons, if it is caused by the balance of trade deficit, will result in an increase in domestic unemployment. The case of capital inflow than the outflow of capital, domestic capital will result in tension, thus affecting economic growth.
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