What Is a Spot Rate?

The spot exchange rate, also called the spot exchange rate, refers to the price at which a currency is currently trading on the spot market. That is, the exchange rate that is settled within two working days after the parties to the transaction reach the foreign exchange trading agreement. This exchange rate is generally the current exchange rate level in the foreign exchange market.

Spot exchange rate

Spot exchange rate

The spot exchange rate is the quotation between two currencies for immediate delivery.

China's spot exchange rate is based on the central parity of the RMB exchange rate announced by the central bank on the day. At present, the exchange rate of the RMB against the US dollar in the inter-bank spot foreign exchange market is five-thousandths, that is, the daily exchange rate of the RMB against the US dollar in the inter-bank spot foreign exchange market can be announced on the day of the RMB exchange rate against the US dollar at the China Foreign Exchange Trading Center The intermediate price fluctuated within a range of five thousandths of a percent.

The approximate exchange rate of the spot exchange rate refers to an exchange rate that is determined in a systematic and reasonable manner and is similar to the spot exchange rate on the date of the transaction. Usually, the current average exchange rate or weighted average exchange rate is used.

The exchange rate used by enterprises for bookkeeping in accounting standards shall be the spot exchange rate. But in

On January 26, 2015, the yuan plummeted for the second consecutive day in the morning, and the depreciation rate was close to 2% of the mid-price. This is the lower limit officially allowed for a single day to float. The U.S. dollar against the renminbi hit a spot high of 6.2572 on the day and closed at 6.2267 last Friday. The RMB continued its downward trend of 0.31% on Friday and is expected to hit its biggest two-day drop since December 2008. The spot RMB discounted by 1.9% from the middle price was a record high. ^[2]

On February 2, 2015, the RMB exchange rate continued its downward trend since January 2015. The spot exchange rate of RMB against the US dollar fell below the 6.26 integer mark in early trading, hitting its lowest level since May 29, 2014. The RMB spot exchange rate hit a minimum of 6.2603, a discount of 1.984% over the median price of 6.1385, and five of the past six trading days approached the 2% limit.

The latest data from the China Foreign Exchange Trading Center shows that on the 2nd, the central parity rate of the RMB against the US dollar was reported at 6.1385, a decrease of 15 basis points from the previous trading day, and the lowest since December 4, 2014.

The central parity of the yuan against the US dollar fell 0.29% in January. In the last week of January, the spot exchange rate of the renminbi approached the daily limit level for four consecutive trading days. The spot exchange rate of RMB against the US dollar fell by 0.75% in January, falling for three consecutive months.

It is not the first time that the RMB has experienced such a large fluctuation. As early as the first quarter of 2014 and the end of 2014, the RMB exchange rate experienced similar fluctuations. In view of the first annual devaluation of the RMB against the US dollar in 2014, the market has caused speculation as to whether the RMB will move into a depreciation channel. ^[3]

On March 2, 2015, the spot exchange rate of RMB against the US dollar hit a new low of nearly 29 months, and the middle price continued to decline to a low of nearly four months. Traders said that the central bank cut interest rates to increase the pressure on the devaluation of the yuan, but today the weaker mid-range price was less than expected, and also limited the volatility of spot transactions, which continued to fluctuate within a narrow range near the limit.

As of the close, the RMB closed at 6.2730 yuan against the U.S. spot, down 34 basis points, the lowest since October 11, 2012, and closed at 6.2696 yuan last Friday. ^[4]