2.7.1 Maintain Discount Rates

This topic provides the systematic instructions to maintain the discount rates.

Discount rates are the interest rates (for a currency) that you use to compute the Net Present Value (NPV) of an outstanding FX contract.

The discounting rate for a Currency and Rate Type is maintained in the FX Discounting Rate Maintenance screen. These discounting rates will be used when contracts in different currencies are revalued using the NPV method of Revaluation.

1. On the Home page, type FXDDIRAT in the text box, and click next arrow.

   The Discount Rate Input screen is displayed.

   Figure 2-7 Discount Rate Input

   
   Description of the illustration fxddirat__cvs_main.jpg
2. On Discount Rate Input screen, specify the details as per requirement.
3. Click Exit to close the screen.

   The discount rates maintained are for a Currency and Rate Type combination. After the combination is selected, proceed to set up tenors and the rates applicable to each tenor.

   For information on fields, refer to the below table.

   Table 2-6 Discount Rate Input - Field Description

   Field	Description
   Currency	Select the Currency from the option list available.
   Base Date	The discount rates that you maintain subsequently will apply to FX contracts from the base date that is displayed here. The current system date will be displayed in this field. You can change the default value. However, you can only enter a date that is the same as or later than the current system date.
   Rate Type	The discount rates that you maintain are for a Currency-Rate Type combination. Select the rate type for which you are defining discounts.
   Period Code	You can maintain discount rates for the Currency – Rate Type combination for specific tenors (in days). These tenors are referred to as ‘Periods’ in Oracle Banking Treasury Management. A Period commences on the Base Date applicable to the Currency and Rate Code that you selected and ends on the date that is displayed in the Actual Date field. For contracts involving currencies, for which you have not maintained discount rates, the rates of the discount currency specified in the Bank Parameters will be used. You must specify the discounting rate for a period before you enter the next period.
   Discounting rate	Maintain the discounting rates for different periods for a Currency and Rate Type in the form of discount points (on a percentage basis). The rate entered against each period will apply to contracts whose transaction date is between the Base Date and the Actual Date. In the Discounting Rates column, specify the discounting rate for the period code that is specified in the previous column (for a currency).
   Actual Date	The system displays the actual date on which the period specified ends.