Spot and TT Buying Rates

"Spot" and "TT" are terms commonly used in the context of foreign exchange (forex) trading and international trade. Here's what they mean in relation to buying rates:

Spot Rate:

The spot rate is the current price at which one currency can be exchanged for another. It represents the immediate exchange rate for a transaction that is settled on the spot, or "on the day." In other words, if you were to exchange currencies right now, the spot rate would be the rate you would get. The spot rate is used for transactions that need to be settled quickly.

TT Buying Rate:

"TT" stands for telegraphic transfer, which is a method of transferring money from one bank account to another. The TT buying rate is the exchange rate at which a bank will purchase a foreign currency from a customer using a telegraphic transfer. This rate is often slightly lower than the spot rate because banks add a spread (a small margin) to the spot rate to cover their costs and make a profit.

Here's a breakdown of the two rates:

Spot Rate: This is the base rate that you would see if you were looking at the current exchange rate between two currencies.

TT Buying Rate: This is the rate at which you would buy foreign currency from a bank using a telegraphic transfer. It is typically lower than the spot rate due to the spread added by the bank.

When you're looking to exchange currencies, you would use the spot rate to get an idea of the current market value, but the actual transaction rate you receive might be the TT buying rate if you're using a bank and paying for the service with a telegraphic transfer.