A currency exchange rate is a conversion rate between two currencies. Each organization has a base currency in which it conducts its finances, e.g., US Dollars, GB Pounds. Currency exchange rates can be stored in the application to support the payment and receipt of monetary amounts in a currency other than the base currency. All currency exchange rates for the organization are expressed in comparison to the organization's base currency.
For example, the organization makes pension payments to entitled participants who have retired to other countries. The base currency of the organization is Euros. John Smith has retired to England where the currency is Sterling. John's weekly payment of €100 coverts to £69 using an exchange rate of Euro/GBP 0.6864.