Introduction: The balance of payment is a systematic record of all economic transactions of residents of a country with the rest of the world during a given period of time. BOP has two components-Balance on current account and Balance on capital account. The main purpose of keeping these records is to know the international economic position of a country which helps the Government in making decisions on monetary and fiscal policies on the one hand, and trade and payments policies on the other. When BOP of a country is in equilibrium, the demand for the domestic currency is equal to its supply. If the balance of payments moves against a country, adjustments must be made by encouraging exports of goods, services or other forms of exports, or by discouraging imports of all kinds. No country can have a permanently unfavorable balance of payments. Total liabilities and total assets of a nation must balance in the long run.