Quote Currency-What is the Quote Currency?
Denominated currency is specified in the contract is used to calculate the price of currencies, these currencies may be exporting or importing country's currency can also be a third country currency, but must be freely convertible currency. The specific use of the currency in which the agreement by both parties. Payments for those who signed the agreement with China, and limit the use of a currency, a State may use the provisions of the currency.
Denominated currency - denominated in the currency flow chart of the basic profile
Denominated currency (Money of Account) is used to calculate the price stipulated in the contract currency. If the price of the contract the parties agreed in a currency (eg U.S. dollars) to represent, and does not provide for payments in other currencies, then the provisions of the contract currency is denominated in the currency, but also the currency of payment (Money of Payment). Denominated in currencies such as the addition, but also provides for other currencies (eg, pounds) to pay, then the pound is the currency of payment.
The International Sale of Goods in general, the prices are expressed as a certain amount of specific currencies (such as 300 U.S. dollars per tonne), usually no longer requires the currency of payment. According to the characteristics of international trade, the currency used for pricing, you can export the national currency of importing countries can also be a currency or a mutually agreed third country currency, by the buyers and sellers through consultation. As the monetary value of the world is not static, especially in the world in many countries generally under conditions of floating exchange rates, often used a variety of major currencies-denominated market value of more serious instability. International Sale of Goods longer than the usual delivery time, from contracting to perform the contract, often need to have a process. During this period, denominated in the currency market is to change, even drastic ups and downs, the result would directly affect the economic interests of both imports and exports. Therefore, how to choose a contract denominated in the currency on the great economic significance in determining the prices buyers and sellers must pay attention to.
In addition to both countries there are trade agreements and payment agreements, the transaction is itself part of the agreement the transaction must be liquidated according to the provisions of the currency, the general import-export contracts are based on convertibility, international general or agreed to pay means of pricing and payment. However, at present the extent of these soft and hard currency is not the same, the trend is inconsistent. Therefore, specific to a particular transaction, must be in-depth investigations and studies, based on the trend as much as possible and strive to develop our favorable currency as a quote currency. In theory, for export transactions, the use of coins in a more favorable pricing;, while import contracts are more cost-effective with a soft currency-denominated. However, in practical business, what are denominated in the currency as a currency, but also depending on the two sides of the transaction practices, management intentions, as well as prices. If a deal has to be adopted right side adverse currency, you can try to remedy with the following two ways: First, according to the kinds of possible future changes in currency rate, the corresponding adjustment of the external quote; second is possible under the conditions of Terms of fighting for the hedge in order to avoid the risk of exchange rate movements denominated in the currency.
