Autonomous Items
- Autonomous items refer to those international economic transactions in the
current account and capital account, which take place due to some economic motive such as profit maximisation. - These transactions are independent of the state of BOP account.
- These items are also known as ‘above the line items’.
- For example, if a foreign company is making investments in India with the aim of earning profit, then such a transaction is independent of the country’s BOP situation.
Accommodating items
- Accommodating items refer to the transactions that are undertaken to cover deficit or surplus in autonomous transactions, i.e., such transactions are determined by net consequences of autonomous transactions.
- These items are also known as ‘below the line items’.
- For example, if there is a current account deficit in BOP, then this deficit is settled by capital inflow from abroad. The sources used to meet a deficit in BOP, are: (i) Foreign exchange reserves; (ii) Borrowings from IMF or foreign monetary authorities.