An indirect quote expresses the domestic currency price in terms of foreign currency units.
Why It Matters
Indirect quotes are useful when a market wants to express how much foreign currency one unit of domestic currency can buy.
- Direct Quote: The opposite quotation format.
- Cross Rate: A related way of expressing exchange relationships between currencies.
- Exchange Rate: The general pricing concept behind both quote styles.
FAQs
What is the difference between a direct and indirect quote?
A direct quote expresses foreign currency in domestic units, while an indirect quote expresses domestic currency in foreign units.
Why do some countries prefer indirect quotes?
They may prefer them because they align with local market conventions and can make home-currency value easier to read.