Indirect Quote

An indirect quote refers to the representation of a foreign currency in terms of the domestic currency. It is commonly used when expressing the value of one unit of a foreign currency in terms of the domestic currency.

For example, let’s consider the exchange rate between the US dollar (USD) and the Euro (EUR). If the direct quote states that 1 USD is equal to 0.85 EUR, this means that the value of the US dollar is expressed directly in terms of the Euro. However, if the indirect quote states that 1 EUR is equal to 1.18 USD, this means that the value of the Euro is expressed indirectly in terms of the US dollar.

Indirect quotes are typically used when individuals or businesses want to express the value of a foreign currency in their own domestic currency. This can be useful when planning international travel, conducting international trade, or analyzing foreign investments.

To calculate the indirect quote, you need to invert the direct quote. In the example above, the direct quote of 1 USD = 0.85 EUR would be inverted to 1 EUR = 1.18 USD to obtain the indirect quote.

It’s important to note that exchange rates can fluctuate constantly due to various economic factors and market conditions. Therefore, it’s crucial to stay updated with the latest exchange rates when dealing with foreign currencies.

In summary, an indirect quote represents the value of a foreign currency in terms of the domestic currency. It is the reverse of a direct quote, where the domestic currency is expressed in terms of the foreign currency. Indirect quotes are commonly used in international transactions and can be calculated by inverting the direct quote.