A foreign exchange rate tells you how much of one currency you receive for another. A USD/PHP quote of 62.50 means one US dollar converts to 62.50 Philippine pesos before separate fees or deductions. On a $10,000 payment, a change of 0.625 PHP per dollar changes the converted amount by PHP 6,250.
How should a currency pair be read?
Read the pair from left to right. USD/PHP at 62.50 prices one USD in Philippine pesos. Reverse the pair and you must also reverse the arithmetic: PHP/USD is 1 ÷ 62.50, or 0.016 USD per PHP. Mixing the two quote directions is a common spreadsheet error.
The International Monetary Fund glossary defines an exchange rate as the price of one currency in terms of another and notes that it can be expressed in either direction.
Which rate are you looking at?
| Rate | What it represents | How to use it |
|---|---|---|
| Bid | Price at which a market participant will buy the base currency | One side of the market quote |
| Ask | Price at which a market participant will sell the base currency | The other side of the market quote |
| Mid-market | Midpoint between bid and ask at a stated time | A benchmark, not necessarily an executable rate |
| Customer | Rate offered for a specific transaction | Determines the converted amount if the quote is accepted |
| Reference | Published rate calculated under a stated method | Information, valuation, reporting or comparison |
How does the rate change a business payment?
Using an illustrative $10,000 payment, a rate of 62.50 produces PHP 625,000 before separate charges. A rate of 61.875 produces PHP 618,750. The difference is PHP 6,250. This is arithmetic for comparison, not a live quote or savings claim.
Timing, amount, currency liquidity, route and provider pricing can all affect the rate available for a transaction.
Why the transfer fee is not enough
A provider may charge a fixed fee, include part of its price in the customer rate, or use both. A favorable-looking rate can still lose once a fixed charge or receiving-bank deduction is included. Compare quotes close together using the same amount, payout currency and Recipient.
Where Quotable Payments fits
Before an eligible business submits a payment, Quotable Payments can show the applicable currency pair, quoted rate, fees and estimated Recipient amount for the approved route. Compare those values together.
A Currency Account may help an eligible business hold supported balances and choose when a conversion is required.
