An Exporter in India wishes to Discount Trade Bill of SGD of 10,000. Interbank transaction, India spot rate: USD 1 $S=74.10/20$ Rupees and Forward rate at the time of contract. 1 Month 0.15/0.10 2 Months 0.25/0.20 3 Mont

Step 1: Calculation of USD to Rupees interbank = Spot Rate- Swap points- Margin = 74.20 - 0.10 - 0.15% = 74.14 - 0.10 - 0.11 = 73.99 Step 2: Calculation of USD to SGD = Spot Rate + Swap points = 1.36 + 0.04 = 1.40 Step 3: Calculation of Cross Rate = INR/USD = INR/SGD*USD/SGD 73.99 = INR/SGD*USD/SGD 73.99 = INR/USD*1.40 INR/SGD = 73.99/1.40 = 52.85 Step 4: Calculation of amount to be credited to Exporter's Current Account (Before Interest) = 10,000*52.80 = ₹ 5,28,000 Step 5: Calculation of Interest at the rate of 8% for 25 days = 5,28,000*0.08*25/365 = 2,893 The amount to be Credited (after interest) in Indian rupees to the Exporter's Current Account: ₹ 5,28,000 - 2,893 = ₹ 5,25,107. Working note: Note 1: The transit period of 25 Days is considered as 1 Month for Buy and Sell transaction.