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The formula to determine the number of possible cross rates for a specified number of currencies is:
Total Number of Cross Rates = x2 - x
(where x = the total number of currencies being tracked).
Aptify provides functionality that makes it unnecessary to manually create all of the possible cross rates in the Currency Spot Rates service. When a specific combination is required, Aptify creates a new record in the Currency Spot Rates service for the derived combination (to four decimal places). Derived combinations are required when cross rates exist for Currency A to the Base Currency X, and for Currency B to the Base Currency X, but a ratio is needed for Currency A to Currency B, or Currency B to Currency A.
For example, assume the organization only chooses to manually create or import spot rates with a base currency of US dollars. If the currency spot rate for Japanese yen is 120 and the currency spot rate for Canadian dollars is 1.55, the spot rate between yen and Canadian dollars can be derived to be approximately 77.4 (1 Canadian dollar is equal to 77.4 Japanese yen). Aptify creates a Currency Spot Rates record for the derived spot rate when a transaction involves only Canadian dollars and Japanese yen. The derived ratio is then used for the transaction and stored as the spot rate for that transaction.
Once a derived spot rate record is created, that record is used in subsequent transactions until a new derived spot rate record is created. The system creates a new derived spot rate when there are newer records for the currencies making up the spot rate. In addition, the date and time for the new records must be equal or fall within a certain time frame as defined in the Quotation Tolerance Interval entity attribute in the Currency Spot Rates entity. The quotation tolerance interval determines the amount of time two currency spot rates can differ in the date field and still be used to create a derived spot rate record. For more information, see "About the Quotation Tolerance Interval" on page 249.
For example, on January 1st, the following records exist in the Currency Spot Rates service.
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On January 15th, the Currency Spot Rates service is updated and new records for Yen/US U.S. dollar and Canadian dollar/US U.S. dollar are created.
Date | Currency | Base Currency | Spot Rate |
January 15 12:00 PM | Japanese yen | US dollar | 125 |
January 15 12:00 PM | Canadian dollar | US dollar | 1.50 |
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Date | Currency | Base Currency | Spot Rate |
January 15 12:00 PM | Japanese yen | Canadian dollar | 83.3333 |
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If a new Currency Spot Rates record for only one of the currencies in the combination exists, or if the dates for both of the most current currency spot rate records do not fall within the quotation tolerance interval, a new derived record is not created and the previously derived record is used. |
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