1, direct quotation

The direct quotation method, also known as the price payable method, is to calculate how many units should be paid in the local currency based on a certain unit of foreign currency (1, 100, 10000,10000). It is equivalent to calculating how much local currency should be paid for purchasing a certain unit of foreign currency, so it is called the payable price method. Most countries in the world, including China, currently adopt direct quotation. In the international foreign exchange market, Japanese yen, Swiss franc and Canadian dollar are all direct quotations. Under the direct quotation, if a unit's foreign currency conversion cost currency is more than the previous period, it means that the foreign currency value rises or the local currency value falls, which is called the foreign exchange rate rise; On the other hand, if you want to use less local currency than before, you can convert it into the same amount of foreign currency, that is to say, the decline of foreign currency value or the increase of local currency value is called the decline of foreign exchange rate, that is, the value of foreign currency is directly proportional to the rise and fall of exchange rate.

2. Indirect Price Method

Indirect pricing method is also called accounts receivable pricing method. It calculates the foreign currency receivable of several units in the domestic currency of a unit (such as 1 unit). In the international foreign exchange market, euro, pound and Australian dollar are all indirectly priced. In the indirect pricing method, the local currency amount remains unchanged, and the foreign currency amount changes with the relative change of the local currency value. If a certain amount of local currency can be converted into less foreign currency than the previous period, it means that the value of foreign currency rises and the value of local currency falls, that is, the foreign exchange rate falls; On the other hand, if a certain amount of local currency can be converted into more foreign currency than in the previous period, it means that the value of foreign currency declines and the value of local currency rises, that is, the foreign exchange rate rises, that is, the value of foreign currency is inversely proportional to the rise and fall of exchange rate.

Tips: The above contents are for reference only.

Reply time: 2020- 1 1-26. Please refer to the latest business changes announced by Ping An Bank in official website.

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