FX Transaction: Two Currencies to be Converted (SAP Library - European Monetary Union: Euro (CA-EUR))

FX Transaction: Two Currencies to be Converted

Function

To determine the EUR/EUR rate that appears in the transaction display after the changeover, the system converts the amounts from the original transaction (leading currency amount, following currency amount, spot amount) into euros and calculates an artificial euro rate based on the ratio of these amounts to each other. To calculate the transaction rate, the system divides the converted following currency amount of the original transaction by the converted leading currency amount. If the exchange rate notation is the inverse of the original transaction, the system uses the exchange rate notation in the leading currency table to calculate the euro rate.

This ensures that transactions with the same trading amounts are identical and have the same rate, even if the rate notation is not EUR/EUR.

You want to convert a DEM/FRF transaction (inverse rate notation). The entry in the leading currency table is FRF/DEM.

The transaction data is as follows:

Purchase: 1m DEM at a forward rate of 3.0000 (DEM/FRF)

Sale: 3m FRF

Spot rate: 3.1000 (DEM/FRF)

Swap rate: 0.1000 - (DEM/FRF)

The system converts the transaction to the euro by translating the two amounts (assumed exchange rates: EUR/DEM = 2, EUR/FRF = 5)

Currency to be converted	Euro
1,000,000 DEM	500.000
3,000,000 FRF	600.000

The system determines the EUR/EUR rate by dividing the converted DEM amount by the converted FRF amount. This calculation is based on the entry FRF/DEM in the leading currency table TCURL.

The resulting EUR/EUR rate is 0.833333333.

The system calculates the spot and swap rates in the same way.