Currency triangulation

Currency triangulation refers to the process whereby amounts from one national currency are converted to another participating national currency by way of another currency. For example, the euro. Currently, this process applies only to member countries of the European Union that are transitioning their national currency to the euro.

During triangulation, the source currency is first converted to an intermediate value expressed in euros. This amount is then rounded to not less than three decimal places. Finally, the euro amount is converted to the destination national currency and the result rounded to the appropriate number of decimal places for that country. The exchange rate between the euro and each participating currency is set at a fixed rate that never changes.

To establish a currency relationship between triangulated currencies, you must define these currency relationships:

  • From the source currency to the target currency with no exchange rate.
  • From the source currency to the euro with the legally set exchange rate and a Divide operator.
  • From the euro to the target currency with the legally set exchange rate and a Multiply operator.
Note: Only conversion between two currencies of countries participating in the European Monetary Union is affected. Conversion between outside currencies, such as the US dollar, and European currencies remain subject to regular market rate fluctuations and to direct conversion.