There are two methods of exchange rate pricing, one is direct quotation, and the other is indirect pricing. In direct quotation, the amount of foreign currency is fixed, which is called "base currency", while the amount of local currency is variable, which is called "quotation currency", indicating how much local currency a unit of foreign currency can be converted into. Indirect pricing law takes local currency as the benchmark currency and foreign currency as the quotation currency, indicating how many foreign currencies a unit's local currency can be converted into. China's RMB exchange rate is a direct quotation.

direct quotation

Direct quotation is also called GivingQuotation. This pricing method is based on the foreign currency of a certain unit and converted into the domestic currency of several units.

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. Under direct quotation, foreign currency is used as the benchmark currency and local currency is used as the pricing currency; The amount of mark currency (domestic currency) changes with the change of foreign currency or domestic currency. Most countries in the world, including China, adopt direct quotation. In the international foreign exchange market, Japanese yen, Swiss franc and Canadian dollar are all quoted directly, such as Japanese yen 1 19.05, that is, one dollar against 1 19.05 yen.

Indirect pricing method

Indirect quotation method is also called electronic quotation method. This pricing method is based on the domestic currency of a certain unit, which is equivalent to several units of foreign currency. For example, the exchange rate on new york foreign exchange market 199X X is (the median price).

That is to say, the amount of domestic currency remains unchanged, while the amount of marked currency (foreign currency) changes with the change of domestic currency or foreign commodity value. Britain and the United States are both countries that adopt indirect pricing method.