Net Foreign Assets (NFA)
Categories: Econ, International
Time to BOP It like it’s the '90s…or just time to balance those payments.
Net foreign assets is a balance of payments (BOP) status. It’s the difference between how much value a country owns abroad and the value that’s within that country’s borders that’s owned by foreigners.
If a country owns assets that combine to value a greater amount than the value of assets other countries have in yours, then your net foreign assets will be positive. Like if the U.S. owns more abroad than there is foreign investment within the U.S.
With a positive net foreign assets position, a country is a net lender to the world. If it’s negative, that means it’s a net borrower to the world. To balance those payments, the net foreign asset position equals the current account balance.