This article highlights key features of the German balance of payments over the past 100 years and analyses important causes of structural changes in its components. The underlying conditions of monetary and foreign exchange policy are among the significant determinants here. After the end of the Second World War, the experience gained during the period of the Weimar Republic with regard to external developments and their repercussions on the domestic economy strengthened interest in international cooperation on issues relating to the monetary system and the external sector. This environment favoured the economic development of the Federal Republic of Germany through the swift integration of its real and financial sectors into the global economy. Germany’s current account has been positive in most years since 1949 and has tended to record large surpluses since the start of the new millennium. The corresponding net capital exports have led to strong growth in Germany’s net international investment position. However, this development is not the only factor to have shaped Germany’s balance of payments in the new millennium. The financial account, in particular, has seen shifts in its composition, with TARGET balances in the Eurosystem reflecting developments in financial markets and monetary policy.