Definition – What does Balance of Trade (BOT) mean?
Balance of trade (BoT) is an economic measure of the difference between the value of exports and imports for a particular economy over a given period of time. If a nation imports more than the export, then the balance of trade is negative. If a nation exports more than it imports, then the balance of trade is positive. Currency traders consider the balance of trade to be an important piece of fundamental data about the health of a nation’s economy.
ForexTerms explains Balance of Trade (BOT)
A positive balance of trade is referred to as a trade surplus and a negative one is called a trade deficit. The actual significance of a surplus of deficit is something economists have argued over for centuries. For traders, however, the balance of trade can act as an economic indicator for economies that are heavily geared towards exports, such as Japan.
