If there is a small surplus in the combined current account plus capital and financial account for a certain year, then to make the two accounts balance, there will be
To make the two account balance, there will be AN INCREASE IN OFFICIAL RESERVE HOLDINGS. Official reserve holding refers to a country total trade able foreign currencies, gold reserves and special drawing rights. The official reserve holding is a sub division of the capital account and it is used to balance payment on a yearly basis by the central bank of the concerned nation.
