1. Home
  2. Knowledge Base
  3. Dictionary of International Trade
  4. broken cross rates; triangular arbitrage

broken cross rates; triangular arbitrage

(banking/foreign exchange) A forward foreign exchange arrangement which is not for a standard maturity period. Standard periods are: 1 week; 2 weeks; 1, 2, 3, 6 and 12 months.
(banking/foreign exchange) In foreign exchange, disparity among three or more rates. In an old example: if DM 1=30 cents and FF 1.5 while FF 1=22 cents, a Deutsche mark will bring 30 cents if converted directly but 33 cents if converted first into francs and then into dollars.

Was this article helpful?

Related Articles

Need Support?

Can't find the answer you're looking for?
Contact Support