Relationship between current account and financial account

Question 1

What is the relationship between the current account and the financial account?

Answer 1

If an economy has a current account deficit then it must also have a surplus on the combined capital and financial (for simplicity refer to as financial account surplus)

Question 2

How else can foreign currency be obtained apart from exporting?

Answer 2

By encouraging overseas residents to buy UK assets such as shares, government bonds, companies and houses