Base Currency and Quote Currency
In the global foreign exchange (Forex) market, currency prices are quoted as pairs. The Base Currency (also known as the transaction currency) is the first currency appearing in a currency pair quotation.
It is followed by the second part of the quotation, which is called the Quote Currency or the counter currency.
How to Read It
When looking at a pair like GBP/USD:
- Base Currency: GBP (£) — This is the currency you are "selling" or "buying."
- Quote Currency: USD ($) — This is the currency used to measure the value of the base.
The exchange rate indicates how much of the Quote Currency is required to purchase exactly one unit of the Base Currency.
Transaction Logic
If you are sending money from your Naira wallet to a US bank account, NGN acts as your base currency for that specific transaction.