Determinants of Balance of Payments: A Case Study in Bangladesh

Abstract

This paper attempts to empirically review the Bangladesh’s balance of payments. The study assessed the determinants of balance of payment performance in Bangladesh using time series secondary data for the period 1976-2018.The study adopted regression model, normality test, descriptive statistics etc to estimate the relationship between balance of payments and interest rate, inflation, foreign direct investment, exchange rate and grants using stata. However every variable was significant except the interest rate. The study recommends that the government of Bangladesh should focus more on the variables which are significant along with other variables such as terms of trade,gross capital formation and political stabilty for the better management of Bangladesh’s balance of payments.