A currency pair is the quotation of one currency's value relative to another — the foundational unit of measurement in foreign exchange markets. Every forex transaction involves simultaneously buying one currency and selling another, expressed as a pair with the base currency listed first and the quote currency second. The exchange rate represents how many units of the quote currency are needed to purchase one unit of the base currency. Currency pairs are categorised into three groups: Major pairs (involving the US dollar — EUR/USD, GBP/USD, USD/JPY, USD/CHF), Minor pairs (cross currency pairs without the USD — EUR/GBP, EUR/JPY), and Exotic pairs (involving one major currency and one emerging market currency — USD/INR, EUR/INR). In India, currency derivatives are traded on NSE, BSE, and MSE — the most actively traded pair is USD/INR, followed by EUR/INR, GBP/INR, and JPY/INR. Indian exporters monitor USD/INR to assess the rupee value of their foreign currency receivables, while importers track it to estimate the rupee cost of their foreign currency payables. RBI intervention in the USD/INR market through spot and forward USD purchases or sales is a regular feature of India's managed exchange rate framework.
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