Exchange Rate

An exchange rate is the price of one currency in terms of another, set in markets or by a monetary authority’s arrangements. The trap for anyone pricing a contract is the quoting convention: a rate is always one currency expressed in units of another, and which one is the base is a convention that differs by market and by country. “The rate went up” is therefore ambiguous — it can mean the base currency strengthened or weakened, depending on which way round the pair is written. Always record both currencies, the direction, and the date and source of the quote, particularly where a customs valuation or an invoice conversion turns on it.

Why this entry carries no source list. This is an analytical concept from economics, not an instrument any body administers. There is no authority to cite because none is needed: the idea is used to reason about trade, not applied by a customs officer to a consignment. Where numbers are involved they come from statistical compilations whose conventions differ, so figures from two sources are not automatically comparable.