tt bill buying rate

2.  Cash Buying - Rate at which Foreign Currency Cash deposited by the
customer is converted into rupees.
 Cash Selling - Rate applicable when a customer buys Foreign
Currency Cash from the bank.
 Travellers cheques'(T.C.) Buying - Rate at which Foreign Currency
Travellers cheques' deposited by the customer is converted into rupees.

Travellers cheques'(T.C.) Selling - Rate applicable when a customer
buys Foreign Currency Travellers' cheques from the bank.
 Telegraphic Transfer (T.T.) Buying - Rate at which a Foreign Inward
Remittance received by Telegraphic Transfer is converted into rupees.
 Telegraphic Transfer (T.T.) Selling - Rate applicable when a customer
sends an outward remittance through Telegraphic Transfer

3.  What are value dates?
 A value date for a foreign transaction is a day on
which the transaction takes place.
 For inter-bank the transaction dates are two types:
 Cash: Value today
 Tom: value tomorrow
 For customers the dates are two types:
 Spot: Settlement on second successive working
day.
 Forward: Settlement at a pre-deiced future date
beyond the second successive working day.

4.  What is direct quote?
 A direct quote is where the price of foreign
currency is quoted in terms of home
currency.
 E.g. 1 USD = 48.48 INR (Rs.)

5.  What is an indirect quote?
 An indirect quote is where exchange rate is
quoted in terms of variable units of foreign
currency as equivalent to a fixed number of
units of home currency. Simply a reciprocal of
direct quotes.
 E.g. USD 2.07 = Rs. 100

6.  What are inter-bank rates and how are
they different from market rates?
 Inter-bank as the name suggests are buying
and selling rates between any two banks.
Where as market rates are inter-bank rates
plus the bank margins and commissions
which generally depend on the amount of the
exposure.

7.  What is a TT?
 TT or telegraphic transfer is one of the mode for
inward or outward remittance.
 It is the fastest mode of transfer where the buyers
pays the bank the amount in home currency and the
bank pays the equivalent in required foreign
currency to the seller’s bank by a telegraphic code.
 Examples of transactions where TT rate is applied
include payment or receipt of demand drafts, mail
transfers, Telegraphic transfers etc. drawn on the
bank. TT rate is used for all transactions that do not
involve handling of documents by the bank.

8.  What are TT buying and selling rates?
 TT buying rates are applied for purchase of foreign currency by
banks.
 It is applied to a transaction that does not involve any delay in
realization of foreign exchange by the bank.
 The rate is calculated by deducting from the inter-bank buying
rate the exchange margin.
 Thus, all foreign inward remittances which are made payable in
India are converted by applying this rate.
 TT selling rates is applied for selling foreign currency to the
customer by the bank for effecting remittances outside India.
This rate is calculated by adding exchange margin to the inter-bank
selling rate.

9.  What is bill rate?
 Bill buying or selling by any bank involves handling of documents by the
bank. This rate is worse than the TT rate.
 In addition, the bank will also recover interest for the period for which
the bank has lent the funds.
 Bill buying rate is applied when a foreign bill is
purchased/negotiated/discounted.
 When a bill is purchased, the proceeds will be realized by the bank after
the bill is presented to the drawee at the overseas centre.
 In the case of a usance bill, the proceeds will be realized on the due
date of the bill, which includes the transit period and the usance period
of the bill.
 Bill selling rate is applied for transaction involving transfer of proceeds
of import bills. Even if the proceeds of import bills are remitted in foreign
currency by way of DD, MT,TT, the rate to be applied is the bill selling
rate (and not the TT selling rate).

10.  What is Bid/Ask and spread?
 Bid is the inter-bank buying rate and Ask is
the inter-bank selling rate.
 The difference between the two is spread. In
periods of high volatility spread may be
around 5-10 paise, where as in periods of
stability spread may be 0.25-0.50 paise.

11.  What is a forward rate?
 A forward rate is the rate offered for
transaction beyond Spot date. Forward rate =
Spot rate + (premium/Discount).

12.  What are FRAs?
 Forward Rate Agreement is an agreement
between two parties to buy/sell at pr
determined price a pre determined rate. It is
an agreement on forward contract on interest
rates.

13. TT Buying rate
 Dollar / rupee spot buying rate
 Less exchange margin
 TT buying rate
 Rounded off to nearest multiple of 0.0025

14. Bills buying rate
 Dollar / rupee market spot buying rate
 Add forward premium
 Or
 Less forward discount
 Bills buying rate
 Less exchange margin

15. TT selling rate
 Dollar / rupee spot selling rate
 Add exchange margin for TT selling rate
 TT selling rate

16. Bills selling rate
 Dollar/ rupee spot selling rate
 Add exchange margin for TT selling rate
 TT selling rate
 Add exchange margin for bills selling rate
 Bills selling rate