Cross rate (交叉汇率)

Cross rate (交叉汇率 jiāo chā huì lǜ) often refers to the exchange rate (汇率 huìl ǜ) between two non-U.S. dollar currencies which is calculated from the basic rate.

Part 1: Breakdown of Words

• “Cross” (交叉 jiāo chā) as in “cross-currency swap” (交叉货币掉期 jiāo chā huò bì diào qī).
  • “交” (jiāo) as in “traffic” (交通 jiāo tōng), “transaction” (交易 jiāo yì), or “communication” (交流 jiāo liú).
  • “叉” (chā) as in “fork” (叉子 chā zi), or “forklift” (叉车 chā chē).
• “(Exchange) rate” (汇率 huì lǜ) as in “floating exchange rate” (浮动汇率 fú dòng huì lǜ).
  • “汇” (huì) as in “money transfer” (汇款 huì kuǎn), or “report” (汇报 huì bào).
  • “率” (lǜ) as in “probability” (概率 gài lǜ), or “ratio” (比率 bǐ lǜ). 

Part 2: Examples

1. Cross rate arbitrage (交叉汇率套利 jiāo chā huì lǜ).