The board categories of transactions recorded in the 'capital account' of the Balance of Payments accounts are:
(i) External assistance
(ii) Commercial borrowings
(iii) NR deposits
(iv) Foreign investment
Foreign Direct Investment
Portfolio Investment
(v) Other flows

The main components of the current account of the Balance of Payments accounts include:
(i) Import and export of goods
(ii) Import and export of services
(iii) Unilateral transfers.The deficit in current account indicates that the current imports of goods and services and unilateral transfers to rest of the world are greater than the exports of goods and services and unilateral transfers from rest of the world.

All types of physical goods exported and imported are called visible items in the Balance of Payment account. On the other hand, all those services whose export and import are not visible are known as invisible items in the balance of payment account.
Two examples of invisible items are:
(i) shipping
(ii) Insurance and banking.

The Balance of Payments on capital account includes capital transactions relating to borrowing and lending of capital, sale, and purchase of assets, interest payment, etc.The Balance of Payments on current account is the sum of the balance of merchandise trade, services t and net transfers received from rest of the world.The two transactions of capital account are: 
(i) Direct investment
(ii) Private transactions

Under the gold standard, all the currencies were convertible into gold. Thus, the fixed exchange rate system was in operation. All the countries on the gold standard had a stable exchange rate. Each participant country committed itself to convert freely its currency into gold at a fixed price. This, therefore, made each currency convertible into all others at a fixed price. Under the gold standard, BoP disequilibrium was corrected through a counter-flow of gold. For instance, suppose that Indian imports from japan are greater than its export to japan. Since gold is the only means of international payments, it will flow from India to japan. Consequently, while India experiences a decrease in money supply, japan experiences an increase. This implies that the price level will tend to fall in India and rise in japan. Further, the Indian products become more competitive compared to Japanese products in the export market. This change will improve Indian BoP and deteriorate Japanese BoP, eventually, eliminate the initial BoP disequilibrium.

The official reserve transactions are the transactions relating to the sale and purchase of the foreign currency in the foreign exchange market. A country, running down its reserves of the foreign exchange, could engage in the official reserve transactions by selling the foreign currency in the foreign exchange market. Importance Official Reserve Transactions in the Balance of Payments A country can run a Balance of Payments surplus or deficit by increasing or decreasing its official reserves. Under the fixed exchange rate system, countries maintain official reserves that allow them to have Balance of Payments disequilibrium, without adjusting the exchange rate. For instance, if a country runs a deficit on the overall balance, the central bank of the country can supply foreign exchanges out of its reserve holdings. However, if the deficit persists, the central bank will eventually run out of its reserves, and the country may be forced to devalue its currency. Under the flexible exchange rate system, on the other hand, central banks do not intervene in the foreign exchange markets. Central banks, therefore, do not need to maintain official reserves. Thus, the official reserve transactions are more relevant under a regime of the pegged exchange rates than when exchange rates are floating.

Foreign exchange refers to any foreign currency. Thus, US dollars, British pounds are foreign exchange for India. Foreign exchange rate is the price of one currency in terms of another currency. It is the rate at which exports and imports of a country are valued during a period of time.
There is an inverse relation between foreign exchange rate and demand for foreign exchange. Higher the foreign exchange rate, lower the demand for foreign exchange and lower the foreign exchange rate, higher the demand for foreign exchange. Suppose the price of US dollar in India falls from ~ 50 to ~ 40. It means that earlier Indian .. people had to part with ~ 50 to buy one dollar worth of goods from USA. Now they have to part with ~ 40 to buy one dollar worth of goods from USA. It implies that American goods have become cheaper for Indian buyers.
At a lower price of US dollar, India is ready to buy more goods from USA. This raises the demand for US dollars. So, lower the price of US dollars, higher is the demand for US dollars and vice versa. Graphically, the demand curve of foreign exchange is downward sloping signifying the inverse relation between foreign exchange rate and demand for foreign exchange.

In the figure, at price OP, the demand for foreign exchange is OF. At a lower price OP₀, the demand is OF₁, i.e., higher. At a higher price OP₁, demand is OF_0, i.e., lower than OF.

Following are the causes of disequilibrium in Balance of Payments:
1. Natural Causes
Natural calamities like famine, flood, etc. may cause disequilibrium in the Balance of Payments of an economy as these calamities result in a reduction in production and exports and increase in imports.
2. Economic Causes
(i) Economic Development: In order to accelerate the pace of development, underdeveloped countries have to depend on foreign assistance.These countries import advanced machinery, capital goods, and raw material, etc, which results in the excess of imports over exports.Hence, there arises the problem of disequilibrium in Balance of Payments.
(ii) Cyclical Fluctuations: Cyclical fluctuations like inflation and depression also cause the problem of disequilibrium of Balance of Payments. If there is a depression in the world market than exports of a country are affected adversely. Similarly, if prices start rising within the economy, the rate of increase in imports exceeds that of exports, which results in disequilibrium.
(iii) Capital Outflow: If a country invests its capital in other countries in order to earn more dividend then it may result in unfavorable Balance of Payments of the country investing the capital and favorable Balance of Payments of the country where the capital is invested.Hence, the problem of disequilibrium arises.
3. Political Factors
Government expenditure in foreign countries, political instability, cause disequilibrium political relations with other countries partition or unification of cause disequilibrium in Balanceof Paymentsof a country.

Items of Current Account:
(i) Export and Import of Goods: Current account shows exports and imports of visible items i.e., goods like machinery, wheat, steel, etc.
(ii) Export and Import of Services: Current account shows exports and imports of invisible items i.e., services like banking, tourism, insurance, etc.
(iii) Unilateral Transfers: These are those receipts which residents of a country receive or payments that the residents of a country make without getting anything in return. Receipts from abroad are entered as positive items and payments abroad are entered as negative items.
(iv) Private Transfers: These are gifts that domestic residents receive from or make to foreign residents.
Items of Capital Account:
(i) Private Transactions: These are transactions that affect the assets or liabilities of individuals, business, etc. and other non-government entities.
(ii) Official Transactions: These are the transactions that affect the assets and liabilities by the government and its agencies.
(iii) Direct Investment: Direct investment means the act of purchasing an asset and at the same time acquiring control of it.
(iv) Portfolio Investment: It is the acquisition of an asset that does not give the purchase control over I the asset.