Pricing Currency

Pricing Currency is the currency used in international trade contracts to express commodity prices and calculate payment amounts. It is usually also the currency agreed upon by both parties for settlement, but the pricing currency and the settlement currency may differ. Its use scenarios include: quotations, contract amounts, letters of credit, invoices, etc. Precautions: 1) The currency type (e.g., USD, EUR, CNY) must be clearly specified to avoid ambiguity; 2) Consider exchange rate fluctuation risks; exchange rate locking or the use of hard currency may be agreed upon; 3) If the pricing currency differs from the settlement currency, the conversion rules and exchange rate source must be clearly specified; 4) Pay attention to foreign exchange controls and convertibility. Distinction from related terms: the pricing currency emphasizes the 'price quotation' function, while the settlement currency emphasizes the 'payment' function, and the two may be separated; the accounting currency is used for internal bookkeeping. Foreign trade practitioners should choose the pricing currency based on transaction practices, currency stability, and policy risks, and clearly state it in the contract.