Defining Market Rates

Much of the PeopleSoft software approach to market rates and currency conversion is driven by the need to accommodate business practices related to the European Common Currency (euro). In addition to currency exchange rates, PeopleSoft software supports the many types of global market rates, such as interest rates, stock exchange indexes, and economic indicators.

To define market rates, use the following components:

Market Rate Index (MARKET_RATE_INDEX)
Market Rate Type (RT_TYPE_TBL)
Market Rate Definition (MARKET_RATE_DEF)

This section discusses how to:

Define market rate indexes.
Define market rate types.
Define market rate tolerances.

Pages Used to Define Market Rates

Page Name	Definition Name	Navigation	Usage
Market Rate Index	RT_INDEX_TBL	select Set Up Financials/Supply Chain, then select Common Definitions, then select Market Rates, then select Market Rate Index, then select Market Rate Index	Describe the indexes for which you are to track rates. Typical market rate indexes include LIBOR, Bloomberg foreign exchange, and Reuters foreign exchange. An index categorizes the various market rates that you track.
Rate Type	RT_TYPE_TBL	select Set Up Financials/Supply Chain, then select Common Definitions, then select Market Rates, then select Market Rate Type, then select Rate Type	Define rate types that further categorize market rates. Rate types include current, commercial, floating, average, and historical.
Market Rate Definition	RT_RATE_DEF_TBL	select Set Up Financials/Supply Chain, then select Common Definitions, then select Market Rates, then select Market Rate Definition, then select Market Rate Definition	Define tolerance limits for rates and determine what action occurs if a new rate falls outside the tolerance limit. The fields on this page differ according to the rate category of the market rate index.

Market Rate Index Page

Use the Market Rate Index page (RT_INDEX_TBL) to describe the indexes for which you are to track rates.

Typical market rate indexes include LIBOR, Bloomberg foreign exchange, and Reuters foreign exchange. An index categorizes the various market rates that you track.

Navigation

select Set Up Financials/Supply Chain, then select Common Definitions, then select Market Rates, then select Market Rate Index, then select Market Rate Index

Rate Category

Select a rate category from the list. Options include: Commodity Price, Economic Indicator, Exchange Rate, Future Price, Interest Rate, Other, Stock Exchange Index, or Stock Price.

Default Exchange Rate Index

If you are entering Exchange Rateindexes, click the Default Exchange Rate Index check box to indicate which index should be used to retrieve currency exchange rates. You can specify only one index code as the default.

Rate Type Page

Use the Rate Type page (RT_TYPE_TBL) to define rate types that further categorize market rates.

Rate types include current, commercial, floating, average, and historical.

Navigation

select Set Up Financials/Supply Chain, then select Common Definitions, then select Market Rates, then select Market Rate Type, then select Rate Type

Enter a description and short description to define each market rate type that you use.

Market Rate Definition Page

Use the Market Rate Definition page (RT_RATE_DEF_TBL) to define tolerance limits for rates and determine what action occurs if a new rate falls outside the tolerance limit.

The fields on this page differ according to the rate category of the market rate index.

Navigation

select Set Up Financials/Supply Chain, then select Common Definitions, then select Market Rates, then select Market Rate Definition, then select Market Rate Definition

Note: The information that appears on this page depends on the type of index that you select. For example, if you select an index with interest rates, interest rate information appears on this page.

Market rate definitions specify the valid term, currency, and other appropriate field combinations for market rates. For example, if you have a market rate definition for an exchange rate with a term of 30, a from currency of CHF, and a to currency of USD, you can enter a rate using this combination in the market rate table. If you do not have a market rate definition, the system creates one for you using the default values.

From Currency Code

Enter the from currency code to populate all From Currency fields with a common currency in the Rate Definition group box using the Refresh button.

Click the Refresh button to populate the From Currency field entered in the From Currency Code field.

Term

Enter the desired term (expressed in days). A zero term indicates that the spot rate = zero term. Only PeopleSoft Treasury uses non-zero terms; all other applications must use a zero term for spot rate.

From Currency

You can also manually enter the appropriate from currency. This value is used with the to currency value as part of an exchange rate pair. When you use triangulation, include a definition for each of the currency pairs involved in the triangulation.

To Currency

Enter the appropriate to currency. This value is used with the from currency value as part of an exchange rate pair.

Maximum Variance

Indicate the percentage of variance that is allowed when you maintain the market rate. You get an error message if the change exceeds the tolerance. The default value is 2.50 (2.5%).

Error Type

Enter the type of error processing that should occur if the maximum variance is exceeded:

None: No error processing occurs, and the new rate is used even though it exceeds the limit.

Stop: Processing halts, and the system prevents you from saving the new rate.

Warning: This is the default value. A warning appears. You can ignore it and save the new rate.