What is an Exchange Rate | Direct Quote & Indirect Quote
A rate at which one currency can be exchanged with the other. It is a rate at which one currency expressed in terms of the other. It is a rate at which a currency can be bought or sold.
Direct Quote & Indirect Quote
What do you mean by Direct Quote?
- In the above quoted exchange rate:
- The quote is given for 1 unit of $.
- In this given quote, $ behaves like a commodity.
- For an entity in India, $ is a foreign currency.
- The given quote is for 1 unit of foreign currency.
- This is a Direct Quote.
- In a Direct Quote, 1 unit of foreign currency is expressed in terms of local currency.
What do you mean by Indirect Quote?
- In the above quoted exchange rate:
- The quote is given for 1 unit of `.
- In this given quote, ` behaves like a commodity.
- For an entity in India, ` is a local currency.
- The given quote is for 1 unit of local
- This is an Indirect Quote.
- In an Indirect Quote, 1 unit of local currency is expressed in terms of foreign currency.
In order to classify a given Exchange Rate as Direct Quote or Indirect Quote one of the currencies in the quote must be the local currency.
February 02, 2021
February 02, 2020
April 04, 2019
Congratulations…!! CA Harish Wadhwani for scoring 93 marks in SFM (CA Final)
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