5.20.1.1 Deal Rate
The Deal Rate is used when the buy currency of the deal is different from the sold currency. It will be defaulted from the Foreign Exchange Contract Online screen. While liquidating a contract, you can choose to change the deal rate.
When you change the deal rate of a buy type of contract the system automatically calculates the new Sold Amount and displays it in the respective field. For instance, let us assume that you are partially liquidating a Buy Type of FX Contract. The contract amount is USD 2000. The other details of the contract are as follows:
- Bought Amount = USD 2000
- Sold Amount = GBP 1000
- Deal Rate = 0.5
If you choose to change the Bought Amount to USD 1200. The system does the necessary calculations and displays the Sold Amount as GBP 600. On the other hand, if you change the Deal Rate from 0.5 to 0.6, the Sold Amount will be changed to GBP 1200.
Similarly when you are liquidating a Sell Type of FX Contract choose to change either the Sold Amount or the Deal Rate. Accordingly, the system will calculate the Bought Amount.
Table 5-20 Deal Type Parameters
| Field | Description |
|---|---|
|
Value Date |
This is the date on which the contract was liquidated or canceled. |
|
Remarks |
While liquidating or canceling an FX deal, you can enter information about the deal intended for your bank’s internal reference. This information will not be printed on any correspondence with the customer |
|
Premium Discount |
This indicates whether the contract results in a premium or a discount. |
|
Premium Discount Amount |
The difference between the Spot Equivalent in LCY and the Contract Amount in LCY is the Premium or Discount Amount. A minus sign indicates that the contract is at a discount. For contracts involving the local currency, the local currency is taken as the P & L Currency. When such a contract is revalued, the Spot Rate (of the P & L Currency as on the revaluation date) is applied on the contract amount to calculate the Spot Equivalent in LCY. The difference between the Contract Amount in LCY and the Spot Equivalent in LCY is the Premium or Discount Amount. A minus sign indicates that the contract is at a discount. For cross currency contracts, the Spot Rate of the P & L Currency, as against the other currency, is used to calculate the amount in terms of the P & L Currency. The local currency equivalent of this amount is calculated as the Spot Equivalent in LCY. The difference between the Contract Amount in LCY and the Spot Equivalent in LCY is the Premium or Discount Amount. If the cross currency rate has NOT been maintained, the Spot Rate of the P & L Currency is applied on the contract amount to calculate the amount in terms of the P & L Currency. The local currency equivalent of this amount is calculated as the Spot Equivalent in LCY. The difference between the Contract Amount in LCY and the Spot Equivalent in LCY is the Premium or Discount Amount. |
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