On January 28, 2005 an importer customer requested a bank to remit Singapore Dollar (SGD) 25,00,000 under an irrevocable LC. However due to bank strikes, the bank could effect the remittance only on February 4, 2005. The interbank market rates were as follow :
The bank wishes to retain an exchange margin of 0.125%.
How much does the customer stand to gain or lose due to the delay? (Calculate rate in multiples of .0001)
Solution
On July 28, 2008 the importer customer requested to remit SGD 25,00,000.
To consider sell rate for the bank:
US $ = Rs.45.90
Pound 1 = US$ 1.7850
Pound 1 = SGD 3.1575
Hence, loss to the importer
= SGD 25,00,000 (Rs.26.0719– Rs.25.9806)
= Rs.2,28,250
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