Financial Analysis

Data Collection
1

2014 2015 2016

- - -
Balance on goods 751494 761855 752507
Balance on services 261157 261410 247714
Balance on current - - -
account 373800 434598 451685
Statistical discrepancy 47009 101486 74059
(Bea.gov, 2018)

Statistical discrepancies are the difference between the total credits and debits which are being
recorded in the capital, current and financial accounts. It is the basic difference between the
supply and demand of the national accounts. It highlights the difference between the lending in
non-financial and financial accounts in the national accounts. This may arise due to working of
any of the factors like can be due to some missed transactions in the current account transitions
or while calculating the transactions of financial accounts. Even there may be chances of change
in investment position of nations internationally. This increases the risk of errors in the
valuations and this may lead to increase in statistical discrepancy (Stat.fi, 2018). The flows and
valuating flows miscalculations are other sources of the statistical discrepancies. So the
differences of lending and borrowing increase the value of statistical discrepancies. Even the
methods of calculation also vary which results in different figure sets. It can be said that
statistical discrepancy is able to capture the difference between gross domestic product and
income.

Special Drawing rights

Special drawing rights is a kind of reserve asset set internationally and this was set by IMF in
1969 to help the member countries with their official reserves. As per September 2017, about
204.2 billion SDR’s have been allocated to members. They can be easily exchanged for the
freely usable currencies. The value of the special drawing rights is based on eth currencies of
five major countries and these are Chinese RMB, US Dollar, Japanese Yen, The Euro and the
British pound sterling.

The main role of existence of special drawing rights is to provide countries with official reserves
in the form of widely accepted foreign currencies, gold and this could be used to purchase
domestic currencies in tight markets so that the exchange rate could be maintained (Imf.org,
2018). Inadequate support was provided with two reserve assets including US Dollar and gold
for the increase of financial flows and of the expansion of the trade in the world. The concept of
SDR was so initiated by IMF so that various member countries could get international reserves.
Still many developments which have taken place like the fall of Bretten Woods’s system have
decreased the reliance on SDR’s.

References
Bea.gov. (2018). U.S. Bureau of Economic Analysis (BEA). [online] Available at:
https://www.bea.gov/international/bp_web/tb_download_type_modern.cfm?list=1&RowID
=2 [Accessed 10 Feb. 2018].

Imf.org. (2018). About the IMF: Organization and Finances: Special Drawing Rights. [online]
Available at: http://www.imf.org/external/about/sdr.htm [Accessed 10 Feb. 2018].

Stat.fi. (2018). Statistical discrepancy | Concepts | Statistics Finland. [online] Available at:
https://www.stat.fi/meta/kas/tilastollinen_e_en.html [Accessed 10 Feb. 2018].