Currency Rates;From Bankers' angle ' buy low sell high'
| Rate | Description |
|---|---|
| Direct | When foreign currency is fixed (say $) and Indian rupees are variable, In India Direct rates are quoted. When rupee appreciates its beneficial to the importer and when rupee depreciates it benefits the exporter |
| Indirect | When foreign currency is variable and Indian rupee is kept as fixed unit |
| Buying | When bank delivers rupees and gets foreign exchange (say in case of purchase of export bill or encashment of foreign currency travellers' cheques or receipt of remittance from abroad |
| Selling | When bank delivers foreign currency and gets Indian rupees (say in case of payment of import bill or issue of foreign currency travellers' cheques or sending of remittance abroad |
| Spot | It is cash or value today or immediately. TOM= T+1 that is rate today and deal completion by next day. Spot=T+2 (that is 48 hours) |
| Forward | Deal today and delivery later on say 1,2,3,4,6,12 months afterwards. It can be at a premium or at a discount. If foreign currency will be available at a higher price ( that is for more rupees), it carries premium. If available at a lower price (say for lesser rupees), it is at a discount. |
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