The balance of payments approach The second most utilized theoretical approach in exchange rate determination: The basic approach argues that the equilibrium exchange rate is found when currency flows match up vis a vis current and financial account activities. 留 This framework has wide appeal as BOP transaction data is readily available and widely reported. Critics may argue that this theory does not take into account stocks of money or financial assets.The balance of payments approach The second most utilized theoretical approach in exchange rate determination: The basic approach argues that the equilibrium exchange rate is found when currency flows match up vis a vis current and financial account activities. This framework has wide appeal as BOP transaction data is readily available and widely reported. Critics may argue that this theory does not take into account stocks of money or financial assets