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The trade balance has four main effects:
Provide information relating to the supply and demand of a national currency, namely the change to the exchange rate of the domestic currency against foreign currencies.
Reflecting competitiveness on the international market of a country.
Reflecting the state of the balance of the current account and external debt, thus affecting macroeconomic stability. To evaluate the tolerance of the current account balance often use the index as the index of export / GDP, debt ratios / export, import growth rate / export growth, the rate interest rate debt / export growth. Typically experts often use only debt / exports to assess the status of the current balance of assets.
Demonstrating savings, investments and real collection. The relationship between trade balance with savings and investments are shown in the following formula:
X - M = (S - I) + (T -G)
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