In OFSAA, there are primarily three types of currencies. These are the transactional currencies, reporting currencies and functional currency. A reporting currency is a currency into which the balances from other currencies can be consolidated. After consolidation has been performed, then reports can be generated in the reporting currencies. The balances from the reporting currencies can be further consolidated into the functional currency.
For example, a large European bank might consolidate its holdings in Asian currencies to the Japanese yen (reporting currency) and its balances American continent into USD (reporting currency) after which it might consolidate these reporting currencies to the Euro (functional currency).
Status of the currencies in OFSAA
The status of any currency may be either Active or Inactive. We need to activate a
currency before we can do the following
→ Use that currency in a yield curve.
→ Enter exchange rate data for a currency
→ Define Forecast Rates for that currency within OFSAA Asset Liability Management
The currencies can be managed in OFSAA as per the screenshots shown below
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