A customer tenders export bill for GBP 5,00,000 payable 45 days from sight. The transit period is 15 days. He wants to retain 10% of bill value in the foreign currency. Bank's margin is ₹ 0.10. What Rupee amount will be

The bill period is 45 days. The transit period is 15 days. Total period is 2 months. Hence, 2 months forward rate will be applied. We want outright 2 months GBP/INR rate. For this we have to calculate outright GBP/USD and USD/INR rates. USD/INR Spot 44.7000/44.7500 Swap Points 2 Months 00.1800/00.1900 Outright 2 Months 44.8800/44.9400 GBP/USD Spot 1.7500/1.7510 Swap Points 2 Months 00.0025/00.0020 Outright 2 Months 1.7475/1.7490 It is an export covering, hence from bank's point of view it is buying. Hence Buying (Bid) Rate will be applied. GBP/[INR] BID = GBP/[USD] BID x USD/[INR] BID = 44.8800 x 1.7475 = 78.4278 This is an inter-bank rate. To arrive at the Customer rate, exchange margin will be added. Inter-Bank Rate 78.4278 Less: Margin 00.1000 Customer Rate 78.3278 The bill is for GBP 5,00,000 of which, he wants to retain 10% in foreign currency account. Hence, he would be converting GBP 4,50,000. For GBP 4,50,000, the account would be credited with 78.3278 x 4,50,000 = ₹ 3,52,47,510