Spot Exchange Rate

Also found in: Dictionary, Thesaurus, Medical.

Related to Spot Exchange Rate: hedging, Forward exchange rate

Spot Exchange Rate

The exchange rate for which two parties agree to trade two currencies at the present moment. The spot exchange rate is usually at or close to the current market rate because the transaction occurs in real time and not at some point in the future. Some analysts believe that forward rates are an accurate predictor of future spot rates, though many others dispute this. See also: Forward exchange.

Mentioned in ?

References in periodicals archive ?

We should notice that Equation (1) does not involve the future spot exchange rate.

Liquidity, information and the size of the forward exchange rate bias

Finally, the cash flow must be discounted and expressed in domestic currency and the value must be divided by the spot exchange rate.

Currency choices in valuation: an approach for emerging markets

t+k] = logarithm of spot exchange rate at time t + k, [[eta].

Foreign exchange market efficiency. Empirical results for the USD/EUR market

RIP theory is a cornerstone of assessing the efficiency of foreign exchange markets, linking interest rates, spot exchange rates, and foreign exchange rates.

The integration of financial markets in GCC countries

The covariance of risk premiums and expected future spot exchange rates.

Market instability and revision error in risk premium

However, sometimes spot exchange rates are influenced by policy behavior such as increasing or decreasing interest rates to stabilize exchange rates (Christenssen, 2000).

An empirical test of the interest rate parity: does it hold between U.S.A and selected emerging Asian economies?

The model predicts that monetary disturbances will cause more relative volatility in the spot exchange rate than real disturbances.

Macrovariables in determining the exchange of the U.S. dollar and major currencies

18) This is to confirm that expectations on spot exchange rate changes in the near future, a 3-mo horizon, seem to play a more important role than the level of real exchange rates in determining FDI inflows into Korea.

The determinants of Korea's foreign direct investment from the United States, 1980-2001: an empirical investigation of firm-level data

Consequently, we can say that there is no fractional cointegration between the three spot exchange rate series.

Foreign exchange market efficiency: fractional cointegration approach

And once the crisis began, the Bank of Thailand pulled the bone-headed financial move of the decade in May 1997 by purchasing tens of billions of dollars worth of bahts in the forward market at basically the spot exchange rate.

DEFENDING THE BAHT

Because the forward price is linked to the spot price through covered interest parity, intervention in the forward market can influence the spot exchange rate.

The Practice of Central Bank Intervention: Looking Under the Hood

The exchange rate in a forward contract (forward rate) is a function of the spot exchange rate and the interest rate differential between the two currencies.