Forex direct and indirect rates

Direct Rates

Foreign Currency is fixed ---say 1USD = INR 55.70

Indirect Rates
Local currency remains fixed---say Rs. 100 = 1.93 USD
At present, following 4 currencies are quoted in Indirect mode:
EURO, GBP, AUD and NZ$
Cross Rates
Cross rate is price of currency pair which is not directly quoted. It is arrived
at from price of two other currency equations.
1. Suppose bank hasto Quote GBP against INR, but in India, GBP is
not quoted directly. In India,
1USD =48.10 and GBP/USD is quoted as 1GBP= USD1.6000.
Therefore 1 GBP = 48.10X1.6 = 76.96
2. An Import bill of GBP 100000 has to be retired. Rates are:
1 GBP=1.5975/85 USD
1USD = 48.14/15 INR
TT margin =.20%
Here Cross selling rate of both currencies will apply.
Bank has to remit GBP. GBP/USD Quote (Indirect) will be available in
International market whereas USD/Rupee Quote (Direct) is available in
local market. Bank will sell USD to buy GBP.
While buying GBP, bank would like to quote higher rate as Buy high Sell
Low maxim will apply. 1GBP = 1.5985
While selling USD, bank will opt to quote higher rate as Buy Low Sell High
maxim will apply.
1GBP=1.5985*48.15 = 76.9675 + Margin@.20% = 77.1214 (say
77.1225)