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09 March, 2022

Distinguish between Direct and Indirect Exchange Rate

 A direct quote is an exchange rate expressed in terms of the number of units of domestic currency corresponding to one unit of the foreign currency. In other words,  it  involves  quoting  in  fixed  units  of  foreign  currency  against  variable amounts of the domestic currency.

An indirect quote is the expression of an exchange rate in terms of the number of units of a foreign currency corresponding to a single unit of the domestic currency.


In an indirect quote, the foreign currency is a variable amount and the domestic currency is fixed at one unit.