International air transport depends on the ability to establish tariffs, use the service of interline partners and to settle amounts due for interlining traffic in the agreed settlement currency. In order to establish selling fares and to perform interline invoicing and settlement, airlines must have rates of exchange between world currencies. Rules have been developed and maintained so that exchange rates are monitored against base currencies such as USD, GBP, EURO.
IATA Exchange Rates published by IATA are the sole source to support interline billing and establish tariffs.
IATA Clearing Services Exchange Rates
This annual subscription includes:
Call Day Rates (CDR)
Rates for one day each period, seven days after the "advice day" that the IATA Clearing House accepts or makes payments. These rates are used to ensure that ICH customers are not exposed to any currency exchange risk on miscellaneous interline billings that may occur between the time an invoice is billed through the ICH and the time that it is settled.
Five Day Rates (FDR)
They represent the average of the exchange rates for the five banking days ending on the 25th of each month. The rates are expressed in USD, EUR, and GBP. FDR's are used by ICH members to convert interline billing into the billing currency. The previous month's FDR's are used for the current month's interline billing. The process developed to calculate the FDR's also contains a function to identify differentials of over 10% between one month and the next.
Monthly Mean Rates (MMR)
If the calculation of a Five Day Rate (FDR) demonstrates a differential of over 10%, the ICH also produces an alternative rate by calculating the average of that currency's exchange rate for the entire month. This alternative rate is called the Monthly Mean Rate and is used by ICH members to adjust their cargo and passenger invoices.
IATA Rates of Exchange (IROE)
IATA Rates of Exchange provides monthly updates of IATA currency rates of exchange used by the industry for fare/rate construction. They are built based on the average of the five banking days ending on the 10th of each month. The IROE is available for purchase in an Electronic Data File version delivered monthly.
IATA Consolidated Exchange Rate (ICER)
ICER provides daily updates of exchange rates (sometimes referred to as BSR) to be used when converting fares, taxes, and fees to alternate currencies of payment. ICER is the official source for international payment currency conversions used by the industry for pricing and ticketing. The ICER file is offered in an Electronic Data File version available daily.