FOREIGN EXCHANGE RATE QUOTATIONS

Foreign exchange rate quotations refers to the amount of a currency to buy or sell a unit of another currency. Foreign exchange rate quotations may be expressed as SPOT RATE QUOTATION FORWARD RATE QUOTATION

Spot Rate Quotation

There are two ways of quoting spot exchange rate DIRECT QUOTATION INDIRECT QUOTATION

DIRECT QUOTATION
In direct exchange quote the price of foreign currency is quoted in terms of home currency. For e.g.- US$=Rs. 45.50.

INDIRECT QUOTATION
In indirect quotation, the number of the foreign currency is given to deal in unit of home currency. For e.g.-Rs 100 = $2.1505.

BID PRICE AND OFFER PRICE

Percentage spread= Ask price- bid price /Ask price *100

FORWARD RATE QUOTATION

Forward exchange rate is of two types: Fixed Forward Exchange Contract. Option Forward Exchange Contract.

QUOTING FORWARDS RATES

There are two ways of quoting forwards rate: Point Basis. Percentage Basis.