Deficits and surpluses in nations Current Account are financed and spent in it Capital Account. What is this Capital Account? In the broadest definition, the Capital Account is the difference between money flowing in and out of the country as a result of capital investments. The Reserve Account is a part of the Capital Account.

This article focuses on the Capital Account and Reserve Account. We will clarify some of the different definitions around Capital Account and explain what both Accounts imply.