Current account includes three components – net exchange i.e. exports minus imports of goods, net exchange of services and net transfers to and from the country. The balance in this account before accounting for the transfer component is generally referred to as the balance of trade. In India, current account is reported by the Reserve Bank of India.
The exchange of goods and services is recorded for the current period and hence is called current account. The current account figure reveals the pattern of foreign trade. If the balance of trade is negative, then the country is importing more goods and services than its exports of these. The other component of the BOP is the capital account.
Also See: Current Account Deficit, Capital Account, Balance of Trade, Balance of Payments, Net Borrower, Unilateral Transfers