An exchange rate tells you how much of one currency is needed to obtain another. In the USD/INR pair, the US dollar is the base currency and the Indian rupee is the quote currency. A quote of 1 USD = 83 INR, for example, means one US dollar is valued at 83 rupees at that quoted rate; it is an illustration, not a live price.
Base currency and quote currency
Currency pairs are written in a standard order. The first currency is the base; the second is the quote. The quoted number expresses how many units of the quote currency are needed for one unit of the base currency. Always check the pair before interpreting whether a number has risen or fallen.
Bid, ask and spread,A bid is the price at which a market participant is prepared to buy the base currency, while an ask is the price at which they are prepared to sell it. The difference is the bid-ask spread. Retail customers may also face bank margins, service charges and other conversion costs.
Why quotes differ
Rates can differ across interbank markets, authorised dealers, banks, money changers and card networks. The time of the quote, transaction size, liquidity, fees and applicable rules can affect the final amount received. A headline reference rate is not necessarily the rate available to an individual customer.
Reading a currency move,If the USD/INR quote rises, more rupees are needed to buy one dollar, so the rupee has weakened against the dollar in that quotation. If the quote falls, fewer rupees are needed. The pair’s direction should always be interpreted using its exact quote convention.
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