Currency Exchange Rate Validation
Exchange Rate Validation has the following features:
- Movement of historical Exchange Rates to the Currency Direct Access Table.
- Calculation of inverse Exchange Rates for Reporting Currencies.
- Calculation of triangulated Exchange Rates where possible.
Features of Exchange Rate Validation
The goal of Exchange Rate Validation is to ensure that Exchange Rates from all active currencies to all reporting currencies are available for processing. Some of these rates can come from the validated direct input, others are calculated based on relationships with other rates. To support triangulation, all fixed Exchange Rates are available for all currencies that make up an exchange that needs to be triangulated. Also, a direct Exchange Rate between each Child Currency and each reporting currency is calculated and supplied to support quick access to Exchange Rates. If a Child currency is a Reporting Currency, then Exchange Rates are calculated for all currencies having an exchange relationship with the Parent Currency.
Validating Exchange Rate Relationships
You must run the Exchange Rate Validation Process after adding or modifying Exchange Rate Data. Run the process immediately or schedule one or more to be run in the future.
Each Exchange Rate has one of the following statuses:
Table 16-3 Details of Exchange Rates
| Fields | Description |
|---|---|
| Not Yet Validated | The Exchange Rate has been input or loaded but not yet validated. |
| Valid | The Exchange Rate has been validated. |
| Invalid | The Exchange Rate has violated one or more acceptance rules. |
Only Exchange Rates in valid status are available for processing and they are not subject to future validation unless you edit them. The Rate Validation Status is displayed in the Currency Rates Window of the Rate Management.
Exchange Rate Validation Criteria
In the Rate Validation Process, all Exchange Rate relationships in the database are examined for compliance with the following criteria. Error messages and warnings are displayed if one or more criteria are not met.
- If a currency is defined as a Child in a fixed exchange relationship then it must not be in any floating (standard) Exchange Rate Relationship at the same time. Consequently, all floating Exchange Rates to or from the Child Currency must be defined through the Parent Currency. If this criterion is not met then the following message is displayed: Invalid fixed relationship—Child Currency exists in a standard Exchange Rate within the same time period.
- A Child Currency within a fixed relationship must not be a Child Currency in any other Fixed Relationship during the same time period. If this criterion is not met then the following message is displayed: Invalid fixed relationship—Child Currency already exists in a fixed relationship for the same time period.
- A Circular Relationship must not exist. In other words, a Child Currency cannot link back to its Parent in any other FixedRate Relationship within the same time period. If it does, then the following message is displayed: Invalid fixed relationship creates a circular relationship with other fixed Exchange Rates.
- Regarding new Floating (standard) Exchange Rates, from and To currencies must not exist as Child Currencies within any Fixed Exchange Rate Relationships. If this criterion is not met then the following message is displayed: From/To/Both currency(ies) in the new Exchange Rate already exist in a fixed relationship for the same time period.
- If any Exchange Rate is equal to 0, then a warning message is displayed. Generally speaking, 0 is a valid value. You can use it, for example, to designate an Exchange Rate with a currency of a country that no longer exists.
If two Exchange Rate Relationships fail to meet these criteria then both of them will be labeled Invalid. (Exception, if one of the relationships is already in Valid status, then the other one will be labeled Invalid.) For example, if a currency is defined as a Child in a Fixed Rate Relationship and is also defined as being in a Floating Relationship at the same time, then both Fixed and Floating Rates for that currency will be labeled Invalid.
If there are both direct and Inverse Floating Exchange Rates defined for any two currencies (in other words, one currency is both a To and a From Currency in relation to the other), then both relationships will be marked valid.
Running an Exchange Rate Validation
You can run a validation immediately or schedule one or more for later. The Validation Status is displayed in the Currency Rates Window.
You can execute the Exchange Rate validation using the Currency Rates Validation option.
To execute the Exchange Rate Validation, follow these steps:
- Click Currency Rates Validation.
- To execute Exchange Rate validation from the Currency Rates Window, the
following two options are available:
- Specify Dates: After selecting this option, a Select Dates Pane is displayed to enter or verify the Start Date and End parameters. These dates will be passed to the batch for execution.
- Start Date: This defaults to the date of last rate validation.
- End Date: This defaults to the current date.
- Validate For All Dates: Select this option to validate all the rates irrespective of dates.
Note:
This option will replace all of the validated Exchange Rate History and can be a time-consuming process depending on the amount of history available to be processed.