capital account balance
the net purchase of financial assets in a country by foreigners. Put another way, the
capital account balance is the net influx of money from overseas investors. It includes net purchases of domestic financial assets by foreigners minus net purchases of foreign financial assets by domestic citizens.The capital account balance over short periods of time (e.g., a fortnight) is extremely volatile; over a period of a year, however, it usually
offsets the
current account balance. For example, in all years since 1980, the USA has run a large-to-huge current account deficit, but in most years it has run a capital account surplus that is almost as big as the current account deficit.