Standard daily exchange rates for the world’s major trading currencies against the Euro (base currency) as a result a regular daily “concertation” procedure between central banks within and outside the European System of Central Banks, which normally takes place at 2.15 p.m. Central European Time (CET). The reference exchange rates are published both by electronic market information providers and on the ECB’s Web site shortly after the concertation procedure has been completed. There are no rates on weekends. If a transaction falls on a Saturday or Sunday for a rate, the following Monday is usually used.
These rates are considered the most reliable and fair way of tracking exchange rates, since the procedure is based on many markets and eliminates anomalous rates based on local conditions—moreover a single rate is provided, which eliminates arguments. As a result, the Euro Foreign Exchange Reference Rate may be specified in contracts that require ongoing payments for which currencies must be converted, for example an ad valorum (percentage of sales) royalty bearing license, where some sales are for example in Euro, but the payments due in U.S. Dollars. Since the number of decimals used for a rate may vary, it is usual to round the result of any calculation to the number of decimals of the Reference Rate with the largest number of decimals used in the calculation.