Tt buying rate what is it

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These cookies are also used for tracking and online advertising purposes. Marketing Cookies These cookies are used for tracking and online advertising purposes. Foreign exchange. For Me. For My Business. Private Banking. Careers at FNB. What would you like to do? Start new application. Retrieve existing application. Please select. Need help with the process? Daily Banking. Switch to FNB Do it now! Your login details have been entered incorrectly Please note that on your 3rd attempt, your profile will be blocked.

Forgot your login details? This is your third and last attempt available. Your profile will be blocked if you fail to enter your login details correctly. Oh no! Foreign bills collected. Cancellation of foreign exchange sold earlier. For instance, the purchaser of a bank draft drawn on New York based bank may later on request the bank to cancel the draft and refund the money to him. In such case, the bank will apply the TT buying rate to determine the rupee amount payable to the customer.

The method of calculating TT buying rate is shown in Table 5. It is assumed that the foreign exchange to be purchased is US dollars. Bill buying rate to be apply when a foreign bill is purchased. When a bill is purchased the rupee equivalent of the bill value is credited to the exporter account immediately.

However, the proceeds will be realised 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 realised on the due date of the bill which includes the transit period and the usance period of the bill. If a sight bill on London is purchased, the realisation will be after a period of about say 25 days transit period.

The bank would be able to dispose of the foreign exchange only after this period. Therefore, the rate quoted to the customer would be based not on the spot rate in the interbank market, but on the interbank forward rate for 25 days. Likewise, if the bill purchased is 30 days usance bill, then the bill will realise after about 55 days 25 days transit plus 30 days usance bill period. Therefore, the bank would be able to dispose of foreign exchange only after 55 days; the rate to the customer would be based on the interbank forward rate for 55 days.

Two points need noting in loading the bills buying rate with forward margin. First, forward margin is normally available for periods of a calendar month and not for 25 days etc. Secondly, forward margin may be at a premium or discount. Premium is to be deducted to the spot rate and discount should be added to the spot rate for direct quotations, in home rate.

While making calculations, the bank will see that the period for which forward margin is loaded is beneficial to the bank. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. It is basically rates at which other currencies are bought or sold in terms of home currency.

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