Interbank foreign exchange market
The interbank market is the top-level foreign exchange market where banks exchange different currencies. The banks can either deal with one another directly, or through electronic brokering platforms. The Electronic Broking Services (EBS) and Thomson Reuters Dealing are the two competitors in the electronic brokering platform business and together connect over 1000 banks. The currencies of most developed countries have floating exchange rates. These currencies do not have fixed values but, rather, values that fluctuate relative to other currencies.
The interbank market is an important segment of the foreign exchange market. It is a wholesale market through which most currency transactions are channeled. It is mainly used for trading among bankers.
2010 - 2014
From Exchange Rates to Actual Charges
This article explains some of the differences between "interbank" ("official") exchange rates and the conditions which in practice are applied by banks and credit card companies when buying and selling small amounts of currency.
The exchange rate information published daily by newspapers, central banks and other public sources is based on an average of interbank transactions, which occur electronically. These conditions, in which the difference (or spread) between the bid and the ask (or buy and sell) price is between 0.03% and 0.07%, are usually applied only to transactions of one million dollars or higher.
Unidad de Fomento
The Unidad de Fomento (UF) is a Unit of account that is used in Chile. The exchange rate between the UF and the Chilean peso is now (today) constantly adjusted for inflation so that the value of the Unidad de Fomento remains constant on a daily basis during low inflation.
It was created on January 20, 1967, for the use in determining principal (monetary item) and interest (constant real value non-monetary item) in international secured loans (monetary items) for development, subject to revaluation according to the variations of inflation. Afterwards it was extended to all types of bank loans (monetary items), private or special financing (monetary items), purchases (trade debtors/trade creditors being constant real value non-monetary items) or investments on installments, contracts (constant real value non-monetary items), and some special situations. Also it is used in legal standards such as the par value of stock/capitalization (constant real value non-monetary items) of companies, fines (payables being constant real value non-monetary items), etc.