👉 The capital fluid, often referred to as the "capital account," is a component of a country's balance of payments, tracking all transactions involving the nation's central bank reserves and foreign currency. It encompasses two main parts: the financial account, which records transactions such as foreign investments and loans, and the reserve account, detailing changes in foreign exchange reserves. Essentially, the capital fluid measures how much foreign currency a country is importing or exporting and how its central bank is managing these foreign reserves, reflecting the country's economic interactions with the global market.
