Multilateral exchange rate

Definition

A multilateral exchange rate is the value of a country's currency compared to a basket of other currencies, rather than just one other currency. It reflects the overall external value of a currency in global trade and financial transactions.

Related terms

Foreign Exchange Market: A global marketplace where currencies are traded, and their values determined.

Bilateral Exchange Rate: The value of one country's currency directly compared to another country's currency.

Currency Basket: A group of selected currencies with different weightings used to measure the value against another currency or as a standard