Where the current-account records what a country earns and spends, this side records who is lending to whom. It is the larger and faster-moving half in most modern economies, and it is what actually clears the foreign exchange market on any given day.
Flows differ in stickiness. Foreign direct investment is slow to arrive and slow to leave. Portfolio flows into bonds and equities respond to rate expectations and risk appetite within days, which is why a change in the interest-rate-differential can move a currency before any trade flow adjusts at all.
Official flows sit here too: intervention and reserve accumulation appear as changes in fx-reserves, which is why reserve data is scrutinised for evidence of central-bank-intervention.
Example: a country with a $15bn current account deficit records roughly $15bn of net inflows here, say $6bn of direct investment, $11bn of portfolio inflows and a $2bn increase in reserves.
Related: balance-of-payments, current-account, fx-reserves, capital-controls