Interest paid on loan taken from IMF will be recorded in ________ side of ________ account.

Debit, Current

Interest paid on loan taken from IMF will be recorded in debit side of Current account.

When a country receives a loan from the International Monetary Fund (IMF), it is recorded on the Capital Account of the Balance of Payments on the Credit side of the Capital Account. Similarly, when a country repays a loan received from the International Monetary Fund (IMF), it is recorded on the debit side of Capital Account of the Balance of Payments.

However, payment of interest on loan received from IMF is a part of Current Account. The current account records the flow of goods, services, investment income, and current transfers between a country and the rest of the world. Investment income includes interest payments, dividends, and profits on foreign investments. Since the country is paying interest on a loan from the IMF, it will be reflected in the current account.

Interest paid on a loan is an expense for a country and the expenses are recorded on the debit side of the accounting equation. Therefore, Interest paid on loan taken from IMF will be recorded in debit side of Current account.