A spot transaction is a straightforward exchange of one currency for another.The spot rate is the current market price, which is also called the “benchmarkprice”. Spot transactions do not require immediate settlement, or payment“on the spot”. The settlement date, or “value date” is the second businessday after the “deal date” (or “trade date”) on which the transaction is agreedby the trader and market maker. The two-day period provides time to confirmthe agreement and to arrange the clearing and necessary debiting andcrediting of bank accounts in various international locations.
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