Balance of payments is the statement of a country's trade with other nations.

The relationship
between balance of payments and exchange rates under a floating-rate exchange system
will be driven by the supply and demand for the country's currency and all transactions taking
place with other countries.

The balance of payments affects the exchange rate and the exchange rate affects the inflation.

Inflation in the country is due to the exchange rate, i.e. if the currency value of the home country
decreases then the imports also becomes more expensive. And cause inflation

For example, 1 dollar is equal to our 100 rupees and we import a pen for 1 dollar but suddenly
our currency becomes devalued from which now one dollar goes from 100 to 150 rupees. Now
suddenly the price of the pen will increase to 150 rupees Pakistani because the price of the pen
is only one dollar but the dollar has become expensive. This is how inflation is caused by the
exchange rate.