Base currency: Difference between revisions
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Generally it means the currency to which other currencies are compared. | Generally it means the currency to which other currencies are compared. | ||
In a multicurrency liquidity arrangement, refers to the currency in which the master account is denominated and to which all other currencies are converted. | In a multicurrency liquidity arrangement, refers to the currency in which the master account is denominated and to which all other currencies are converted. | ||
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* [[Variable currency]] | * [[Variable currency]] | ||
[[Category:Manage_risks]] | |||
[[Category:Trade_finance]] | [[Category:Trade_finance]] | ||
Revision as of 11:40, 19 November 2014
1.
The base currency in a foreign exchange rate quotation is the currency which there is one of.
For example in the quotation 1 GBP = 1.4600 USD, the base currency is GBP; meaning one British pound is exchanged for a variable number of USD, depending on the rate quoted.
Also known as the Reference currency or the Fixed currency.
2.
Generally it means the currency to which other currencies are compared.
In a multicurrency liquidity arrangement, refers to the currency in which the master account is denominated and to which all other currencies are converted.
The base currency also serves as the basis for all interest rate calculations.
