13.6 Currency Conversion

Cash flows, account balances and other input data is captured and stored in terms of the natural currency of the account. The application converts cash flows and balances from its natural currency to the local or reporting currency based on the prevailing spot rates or forward rates, as specified by you. Local currency is provided for each legal entity as a download while the reporting currency is selected at the time of Run execution.

The currency conversion features in LRM are:

• Option to select forward exchange rate or spot rate for currency conversion.
• Forward exchange rate is interpolated to the cash flow date using linear or log linear interpolation method, as specified by you.
• If a direct quote between currencies is not available then an indirect quote is used. For currency pairs that do not have a quotation against each other, either direct or indirect, the cross exchange rate is calculated using the direct quotes available against US Dollar (USD) for each currency, as USD is considered as the base currency in each quote. The base currency can be configured in the SETUP MASTER table.