(1) Conversion between foreign currencies and RMB
After we quote the price in RMB, if the importer requires payment in RMB, the conversion should be based on the bank’s selling price. The conversion formula is: RMB quotation = foreign currency quotation x bank selling price / 100. For example, if the original quotation is USD 1,435/ton, and the USD exchange rate announced by the People’s Bank of China on that day is 678.60-677.60 (the former is the buying price of USD 100, and the latter is the selling price), then the RMB price should be: USD 1,435/ton x 677.60/100 = RMB 9,723.56/ton (2) Conversion between different foreign currencies There are two methods for converting one foreign currency into another: ① direct conversion, that is, conversion based on the direct exchange rate between the two foreign currencies ② indirect conversion, first converting the original foreign currency into the domestic currency, and then converting the converted domestic currency into another foreign currency. my country usually adopts the indirect conversion method because banks mainly announce the exchange rate between foreign currencies and RMB.
In the above example, if the foreign merchant requires a quote in yen, since the base price is the US dollar, to change to receiving yen, it is necessary to sell yen to the bank and then buy US dollars from the bank, so the conversion formula is
Japanese yen quotation number = US dollar quotation number x US dollar selling price ÷ Japanese yen buying price
Assuming that the exchange rate for 100 Japanese yen during the same period is 0.68676-0.68754, the Japanese yen price should be quoted:
1435 US dollars/ton x 0.68754 ÷ 0.68676/100 = 143662.98 Japanese yen/ton
If the numerical results obtained by the indirect conversion method and the direct conversion method are too different, the conversion method should be determined in advance through consultation with the foreign merchant.