What is the Foreign Trade Balance?

It is used to define the relationship between a country's export and import values. Exports refer to the total sales made abroad, while imports refer to the total purchases made from abroad. If a country's import values are greater than its exports, the net export value will be less than 0. In this case, the country has a "foreign trade deficit."

If the total volume of exports is greater than imports, there is a "foreign trade surplus."

If these two values are equal, there is a foreign trade balance. Countries' economic policies are planned to eliminate foreign trade deficits. The payment of export costs in the exporting country's currency increases the demand for that country's currency, and the currency in question appreciates. The appreciation of the currency creates a foundation for the achievement of economic balance.