In the balance of payments, other capital is a residual category that groups all the capital transactions that have not been included in direct investment, portfolio investment, and reserves categories. It is divided into long-term capital and short-term capital and, because of its residual status, can differ from country to country. Generally speaking, other long-term capital includes most nonnegotiable instruments of a year or more, like bank loans and mortgages. Other short-term capital includes financial assets that can be liquidated in less than a year such as currency, deposits, and bills.
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In a balance of payments, all capital that does not fit into the direct investment, portfolio investment, or reserves categories. It is classified as short-term or long-term based on whether or not it is likely to be liquidated in the coming year.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved